Indira Gandhi from 1966-1984 (except 1977 elections where she lost) was re-elected every time because she championed the cause of poor people although poverty never got eliminated. The most disastrous consequence of such a welfarist policy led to a declining economy, but an increasing vote share for her. India grew at 3% but Congress vote share went on increasing to more than 30%. "Garibi Hatao" was her slogan but Garibi was never eliminated and India got more corrupt. "Garibi" increased under her. If that was not the case why would we still have poverty?
Sonia seems to have caught this same pulse. She knows that it is the poor people who vote and so long as they are satisfied power cannot cease to Congress. Who cares about economy anyways? Economics is always stupid while populism is always clever. Whenever this country has seen real all around growth people seem to have voted out that Government. Indians are to blame for themselves because poor people vote, half of the middle and rich class people are hardly concerned (and yet they want Government to be good...insane !!). This happened to Congress's Narasimha Rao in 1996 and BJP's Vajpayee in 2004. People really don't know what they want. If Sonia comes back to power in 2014, it is a clear victory to people who don't care about economy. We currently have a second term PM whose silence is being projected as innocence and when the PM says global factors are affecting India, here is a clear rebuttal to this blatant lie. There are 59 countries growing faster than us (considering 5% GDP growth) in the very same global scenario as the PM is accusing of. If everything is caused by global factors- why are we importing so much and why are we spending so much when we don't have any money? PM's statements in Parliament clearly reflect bankruptcy of ideas and cover up of misdeeds by his Government. His image is declining everyday but Congress will come back as people will vote them back.
Sonia will bounce back to power with a thumping majority because of Food Bill and there can be hardly any doubt I feel. All the corruption will get covered up as people will vote for Congress back.
My problem is not the Food Bill. My problem is its timing and its implementation at a time when we really don't have a transparent system by which food can reach the poor. Let's get to some glaring facts (Source):
- Of 79 countries on the Hunger Index, India stands at 65.
- Rs.60,000 crore worth of food is wasted due to inadequate storage facilities - Why no step has been taken to increase the storage capacity in the 9 years of UPA rule? If this was increased the food would have been distributed to poor. This would have not costed anything on the finances.
- Rs.2.6 crores is spent every year to increase storage capacity but this money is eaten as corruption.
- In 2003 India had produced 63 million tonnes of food grain but had storage capacity of 48 million tonnes and the rest was sold in international prices for prices lower than market price as against allowing them to rot in India (This was under NDA rule)
- 4.5 lakh sacks of wheat (worth Rs. 25 crore) was allowed to rot in UP in 2010. Utter waste of money. Why didn't UPA govt so concerned with the poor not take care of this?
- 3 lakh sacks of wheat was allowed to rot in Haryana under Congress rule
- 56,000 sacks of grain rotted in Maharashtra at a time when Sharad Pawar promised he will increase storage capacity.
- 50% of India's children are malnourished. Malnutrition levels are worse than sub Saharan Africa. What an absurd contrast? Excess food rotting and children with no food.
- There are enough cases of corruption in the existing PDS. There is absolutely no transparency and there are huge leakages in distribution, and money - What else can accurately explain that 50% of India's children are malnourished. Without improvising PDS Food Bill will only lead to more corruption.
- 70% of poor never get the grains under PDS and 55% of total grain gets leaked out based on studies done in the past few years.
So, if these are shocking facts what does Food Security Bill do? (Source)
- Aims to cover 75% of rural India and 50% urban India's poor people.
- 5 kg of foodgrain/person/month at Rs.3 for rice, Rs 2 for wheat and Rs.1 for millets and other coarse graisn
- Free meals for pregnant women, infants 6 months - 6 years age in the nearby anganwadi's.
- State Food Commissions appointed to address grievances (It's laughable because these commissions would eat up money than allow the process work transparently. Any common educated man knows this)
- State governments should make progressive steps such as doorstep delivery of foodgrains; end-to-end computerisation; leveraging “aadhaar” (UID) for unique identification of entitled beneficiaries; full transparency of records; preference to public institutions or bodies in licensing of fair price shops; management of fair price shops by women or their collectives; diversification of commodities distributed under the PDS; full transparency of records; and “introducing schemes such as cash transfer, food coupons or other schemes to the targeted beneficiaries in order to ensure their foodgrain entitlements” as prescribed by the central government.
Agreed that this country needs such a bill and it is not new since Tamil Nadu, Haryana, Chattisgarh, Andhra Pradesh, Rajasthan and Orissa already have similar schemes. If all these states have the schemes has hunger been eliminated in these? It isn't. Why? It is plagued by faulty, non-transparent processes and high corruption. Only Chattisgarh has been an exception and the central government itself can emulate Chattisgarh.
What sets Chattisgarh system of Food Bill apart? These measures below have reduced leakages from 40% to 4%. This is a model example as several economists have also agreed to. The Central Government doesn't seem to include any of these to their flagship as given below.
- Elimination of fair price shops by private firms and substituted by cooperatives, panchayats or women’s self-help groups;
- Raised the commission earned by these mediators;
- Computerised ledgers in godowns and, among other things
- Sent out a diktat that all food-related grievances must be settled by district magistrates within 15 days.
In the Center's bill why would State Commissions bother to address these issues when the grievance mechanism is not strict and quick? That is why I re-emphasize that this is a faulty bill leading to more corruption and passed at a time when money and economy are in a tight spot and it is nothing but careless spending and done solely for vote bank politics.
Costs of this bill:
The UPA Government says it already spends 90,000 crore on food subsidy and this bill adds another 10,000 crore. So, by its estimates about 100,000 crore. This is all but a gross under evaluation of expenses. This is just to calm down the markets. Let's see how much money Government has and how it can spend. The numbers below are taken from this article.
2013-2014 Receipts of Govt (money collected by Government) => Rs.11,22,799 crore
Add Govt's estimate of Food Security bill => Rs. 1,24,723 crore
- i.e 11.10% of total money Govt gets will be spent on this.
- Economists estimate it will be 28% since the figure given by The Government doesn't take many costs like administrative ones in this estimate
- Commission for Agricultural Costs and Prices - Ministry of Agriculutre estimates to be 21.15%
- Either way 20-25% of money Govt gets is being spent on Food Bill - This is 3% of GDP and this is huge financial burden. What about money for electrification, water supply, health etc? No one knows
Impact on Farming and why prices will go up with this Bill:
- We don't produce enough rice to meet these increasing demands. Therefore, we will have to import and the amount would be in dollars. Result: Increasing deficit, and pressure on rupee.
- Inflation will be natural if even food is now imported more than ever.
- While farmers may get inspired and produce more rice and wheat (because the government has assured the purchase) they will stop diversifying into any other crops and vegetables. This will lead to importing vegetables.
- Govt argues that farmers who grow vegetables will be assured of rice and wheat they will continue to grow vegetables and this may reduce the import. Will this mean that prices of vegetables will come down in the coming years? Not at all. People's lives will get worse in the coming years but people will still vote for Congress.
At the end of this article I wish to emphasize the fact that the Congress doesn't have any explanation as to why it waited this long to make this bill pass and why it passed now.
It is often said that a hungry person cannot get satisfaction from anything other than food. Economics, politics or anything else doesn't matter to such a person. It is precisely these people that will be selected and Congress would create a hype out of this. This would turn the entire election game in the favor of Congress. If this bill has to succeed the ground work needs to be strong enough. At this point the sole aim is to win back votes and come back to power. This bill will surely do. The opposition led by BJP could not have opposed this since they too would risk losing votes if they blocked it.
It is often said that a hungry person cannot get satisfaction from anything other than food. Economics, politics or anything else doesn't matter to such a person. It is precisely these people that will be selected and Congress would create a hype out of this. This would turn the entire election game in the favor of Congress. If this bill has to succeed the ground work needs to be strong enough. At this point the sole aim is to win back votes and come back to power. This bill will surely do. The opposition led by BJP could not have opposed this since they too would risk losing votes if they blocked it.
