PRAGOTI

It is surprising that the NAC-recommended press release does not reflect any spirit of the strong social-political action behind the mobilisations around the food security issue since last few years. More distressing is to hear such discussions when the country has been witnessing high inflation fuelled by higher levels of food inflation. It would not be an exaggeration to say that the fears of the proposed FSA turning into a sham and, in turn, only used as a rhetorical cover against the opposition has almost come true.

The Context

Last year, during the initial debate around the Food Security Act (henceforth FSA); we had argued that a food security legislation (of whatever form) cannot avoid the first principle of progressive and equitable social policy- universalisation. We had clearly stated that the context of such food security law emerged owing to the withdrawal of universal Public Distribution System (PDS) during the neoliberal policy-era. We had also discussed how the ‘debate’ around the proposed act, very crucially, assumed an entire system of ideological constructs on the question of agrarian change, hunger and ‘livelihoods’ in India. The initial discussions, as reflected in multiple drafts of the proposed act from various quarters- government and others, we concluded, “take a very technical-clinical-symptomatic view of the agrarian question (and consequently food and nutrition) being discussed here. At the level of analysis of causes behind the rise in starvation deaths as well as agrarian crisis, it seems that the discussion believes that the widespread loss of livelihoods and rise in mass hunger are direct results of two isolated developments in agriculture (namely ‘irrational’ use of technology and opening of external trade) without taking a comprehensive view of the larger projects of landlord-capitalism and neoliberal globalisation in India”. Our view remains that the question of mass poverty and food insecurity in India cannot be resolved without referring to one, the caste-ridden, semi-feudal agrarian structure and two, the neoliberal project of agrarian transformation, simultaneously into a unified analytical framework.

With respect to specifics of the proposed law, it is important to question the fundamental reorganisation of public and social policy during the current regime. While state has been dubbed as a mere enabler, its most basic welfare functions also started to be weighed against private motives and notions of efficiency. The introduction of targeting in public policy was a prime manifestation of this tendency. However, it was agriculture which formed the core of the liberalisation project. We had discussed how the food and agricultural system in the country was fatally harmed by wrong policy choices during the 1990s which, ironically again, left vital areas of production and distribution at the mercy of the bania, the sahukar, the middleman and the omnipotent market under a semi-feudal system. The conditions of life for Dalits, Adivasis, agricultural labourers and other oppressed groups in rural and urban India were made worse, as is evident now in NSS and NFHS.

We had argued that it is time to go back to basics and rejecting the neoclassical hangover in political praxis and civil society advocacy. We noted that, “It is almost farcical that the debate, while excludes the political economy and historical context of the agricultural and food policy in India, completely relies on the framework handed down by the neoliberal regime and, on top of that, keeps referring to the Supreme Court Orders. The tragedy lies precisely there: Imagine a liberal democratic order where the most fundamental rights of the citizen (right to life) has to be extracted from the judiciary and the civil society accepts its fate by refusing to replace/enhance it with a political mass movement...this tendency also tells something about the character of the civil society in India...We must, on the contrary, attempt at creating a mass movement while correctly identifying the roots of the worsening conditions of small and marginal peasantry, Dalits, Adivasis, urban migrant workers and agricultural labourers”.

The question of civil society involvement was deemed important to us because the National Advisory Council (NAC) has been at the helm of social policy making in the country since UPA-I. The contradictory assumptions in the food security act debate manifested at analytical levels like the agrarian question which it shifted from production to the circulation realm and hence argued that the real reason of mass food insecurity lies not within but outside agrarian relations. In policy terms, this also implies that the only way state may intervene in the micro-food economy is through identifying poor people and providing them with food grains so that they almost survive but remain unfree, thus enabling rentier-capitalist accumulation in agriculture. Surprisingly still, the debate never considered Annapurna Yojana as its reference point. Competing perspectives on the FSA, effectively, made BPL list as a new test to identify really deserving hungry and needy individuals. Further, it is precisely because the conventional debate never attempted an analysis of the historical-political economic basis of emergence and sustenance of such conditions of food and nutrition in India, it assumed that FSA as an act of state charity and to a great extent, political mobilization has been replaced by lobbying and networking with few all-important influential politicians. Though, this process is a result of a larger restructuring of the relationship between state policy and political action that has occurred in the country in recent times.

Hence, until the mainstream debate on FSA recognise the perpetuation of an exploitative agrarian structure as the core determinant of large scale food insecurity in India, it would continue to view instances of hunger deaths as mere aberrations away from perfect market equilibrium and hence necessarily adopt a relief approach. This relief approach has, indeed, characterised the civil society perspective on food, agriculture and nutrition in recent times. This is not to say that a standalone FSA should be, in any comprehensive form, able to address fundamental issues social transformation. In contrast, a food security act must, in its short term agenda, focus exclusively on providing state support to the people of the country inflicted by chronic agrarian distress and inflation.

But, as pointed out earlier, this selective-reductionist approach, so deeply rooted in the Indian version, has numerous problems. First, it is plain dishonest public policy-making. It is deceitful and misleading to present a FSA (or for that matter, NREGA-II or else) as the panacea for agrarian distress and chronic character of food and nutrition crisis, which is well documented in academia and media, around the country. Second, the discourse while overemphasises many constraints (fiscal, social and political-real and imaginary) on the way of a more widely-based food security intervention, it falls short of exploring the historical basis of the emergence of these limitations and the scope as well as potential of political action by the exploited majority in a country like India. And finally, as is clear, there are no short-cuts to the establishment of a comprehensive and multi-dimensional social security system in India. The failure of the bourgeois-landlord state in India to overcome exploitative and unproductive structures and constraints from the past must be explicitly recognised rather than packaged in the rhetoric of ‘inclusive growth’. In this respect, the performance of the Indian state in the realm of social policy, especially post-1991, is a study in contradictions between the high-end promises of liberal politics and the core influence of its compromises under the confused leadership of the bourgeoisie of now-developing countries.              

Food Security and Universal PDS in India

The declared objective of the UPA-II government’s proposed Food Security Act is to address the acute problems of hunger and malnutrition in India. The Rome Declaration at the World Food Summit (1996) defined food security as “when all people, at all times, have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life”. Similarly, the Report on the State of Food Insecurity in Rural India puts it, “food security has three components a) availability of food in the market; b) access to food through adequate purchasing power; and c) absorption of food in the body” (See, MSSRF and WFP (2008), Report on the State of Food Insecurity in Rural India, M. S. Swaminathan Research Foundation, Chennai).

The important feature of the proposed FSA, yet to be presented in the parliament, is that it tries to ensure 35 kg of rice and wheat to all the Below Poverty Line (BPL) households in India at Rs 3 per kg. There is no general provision for supply of subsidized food grains for the Above Poverty Line (APL) households in the Bill. In other words, the proposed public distribution system (PDS) under the Bill would continue to follow the BPL-APL division, and further, eliminate the APL sections from its purview. The argument has been put forward by many official quarters that a universal PDS is not financially affordable for a large country like India. In a recent paper, we have tried to analyse this argument and estimate how much it would cost if the PDS has to be universalized in India (See, “Is a Universal PDS Financially Feasible in India?”, Awanish Kumar and Aditi Dixit. Available at http://www.tiss.edu/announcements/attachments/res-brief-PDS.pdf).

Till 1997, the PDS in India had universal coverage in all the States. The PDS was institutionalized in the 1960s and its major objectives were declared to be: (a) maintaining stability in the prices of essential commodities across regions and in periods of price inflation; (b) ensuring the entitlement of basic commodities at reasonable and affordable prices, especially to the poor; (c) introducing rationing during scarcity; and (d) keeping a check on private trade, hoarding and black-marketing (See, Swaminathan, Madhura (2000), Weakening Welfare: Public Distribution of Food in India, LeftWord Books, New Delhi).

With all its problems of leakage and inadequate coverage, the PDS was successful in bringing a large section of our population under a food security net. As Isaac and Ramakumar (2009) argue using NSS data for 1986-87,

“...subsidised purchases from the PDS acted as an important supplement to other sources of purchase of the major food items. The share of purchase from PDS in the total quantity purchased was higher in urban areas compared to rural areas. The fact that, with all its infirmities, the PDS played a role in keeping in check regional disparities in food grain consumption shows its potential as an instrument of welfare” (See, See Isaac, T. M. Thomas and Ramakumar, R (2009), “The Assault on Food Security: A Critique of the Food Security Bill in the Context of Kerala”, Paper presented at the National Meeting of Food Ministers, Government of Kerala, Trivandrum, September 19, available at http://www.agrarianstudies.org/UserFiles/File/isaac_and_ramakumar_The_Assault_on_food_Security.pdf, p. 4).

Thus, what was needed in the PDS by the 1980s was its further expansion, to regions and sections not covered (ibid.). However, official policy in the 1990s took the PDS onto a completely different trajectory. Under economic reforms, primacy was accorded to the logic of fiscal prudence, which entailed drastic reductions in subsidies, including food subsidy. This phase marked an important reform in the PDS, wherein the system was converted from a universal to a targeted system in 1997.

Most contributions to the poverty debate in India employ NSSO surveys that estimate household consumption expenditures. If we take the nutritional status of the population to define the poverty line, a larger number than those identified as “not poor” by the NSSO fall in the category “nutritionally poor” (see, on the validity of the nutrition norm, Patnaik, Utsa (2010), “A Critical Look at Some Propositions on Consumption and Poverty”, Economic and Political Weekly, 45(6), pp. 74-80; also see Patnaik, Utsa (2008), “Re-conceptualisating Poverty”, The Hindu, September 3). While not going into the ensuing debate, it is clear that Deaton and Dreze (2009) also conclude that nearly 80 per cent of the rural and 76 per cent of total population was below the nutritional consumption norm of 2400 calories in 2004-05. They also highlight an increase in poverty, according to the nutrition norm, from around 68 per cent in 1993-94 to 76 per cent in 2004-05 (See, Deaton, Angus and Dreze, Jean (2009), “Food and Nutrition in India: Fact and Interpretations”, Economic and Political Weekly, 44 (7), pp. 42-65).

The Arjun Sengupta committee estimated using the NSS data itself that around 77 per cent of the Indian population could be classified into what the committee calls the “poor and vulnerable” category (with a per capita consumption expenditure of less than Rs 20 per day).

On the other hand, the Suresh Tendulkar committee, which abandoned the calorie norm method of estimating poverty and substituted it with an arbitrary poverty line, estimated the share of the income poor population to be 41.8 per cent in the rural areas and 25.7 per cent in the urban areas (for critiques, See Ramakumar, R (2010), “The Unsettled Debate on Indian Poverty”, The Hindu, January 2, available at <http://beta.thehindu.com/opinion/lead/article74196.ece>; and Swaminathan, Madhura (2010), “A Methodology Deeply Flawed”, The Hindu, February 5, available at http://www.hindu.com/2010/02/05/stories/2010020554300800.htm). All the above estimates of poverty are based on sample survey data, and do not aid in the identification of who the poor are. As Ramakumar (2010) noted,

“Errors of ‘wrong exclusion’ in targeted programmes in India are due to the separation of the processes of (a) the estimation of the number of poor and (b) the identification of the poor. It is for the absence of a reliable and feasible method of combining estimation and identification that political and social movements have been demanding universalisation of welfare schemes like the PDS. It is, thus, essential that sample based poverty estimates from the NSS are not mechanically linked to the eligibility to access welfare programmes.”

After 1997, there has been a massive exclusion of the needy households from the PDS. There have been major mismatches between households classified as BPL by the government and their actual standard of living (Swaminathan, 2000 cited above; Government of India (GoI) (2002), “Report of the High Level Committee on Long Term Food Grain Policy”, Department of Food and Public Distribution, Ministry of Consumer Affairs, Food and Public Distribution, New Delhi; and Ramachandran, V. K., Usami, Y. and Sarkar, Biplab (2010), “Lessons from BPL Censuses”, The Hindu, April 21, available at <http://www.hindu.com/2010/04/21/stories/2010042153701000.htm>).

As noted in report of the “High Level Committee on Long Term Grain Policy” (chaired by Abhijit Sen), “the narrow targeting of the PDS based on absolute income-poverty is likely to have excluded a large part of the nutritionally vulnerable population from the PDS” (GoI, 2002). It is also clear from experience that while the TPDS is ostensibly aimed at reducing the Type I error in targeting, it invariably enhances the Type II error with heavy human and social costs.

Debates have been raging in learned journals on the misplaced contours of ‘poverty lines’ and ‘efficient targeting’ as integral to public programmes while summarily ignoring pleas for appropriately applying nutritional norms instead of arbitrary ‘normative’ estimates. Universal PDS has been the prime victim of this misplaced academic and policy emphasis. On the one hand, we have numerous studies attempting to estimate ‘true poverty’ on the basis of the nutrition norm and coming up with significantly higher incidence of poverty than officially acknowledged. On the other, with the ever more conservative social policy stance of the ruling UPA-II regime, we have seen a progressive increase in the arbitrary nature of TPDS with the almost complete removal of APL allocations from the central quota to States and the whimsical ‘fixing’ of the number of BPL and Antyodaya households. The hope raised by the proposed Food Security Bill would amount to nothing if it follows the current APL-BPL-Antyodaya model and shies away from the fundamental question of universalizing PDS.

On Universalisation of PDS

We must clarify that universalisation is more about its principle rather than treating pre-1997 period as a model PDS. So, our purpose has been both polemical as well as demonstration. While arguing for a universal PDS, we assert the need for a debate around universalisation and a move away from APL-BPL distinctions and also demonstrate that this is within reach, financially. In other words, our argument is that the starting point of the debate must be a universal PDS; we can then devise strategies for the poor within it. Let us also add that universalisation is also, crucially, about inherent policy signals which it provides to the market as well as ‘consumers’. It can also be argued that universalisation is not only contained in non-binding ‘right’ of all households to get susbsidised food but also in actual distribution and offtake of food to the needy and general public at large. However, it is important to point out that offtake and demand themselves are functions of, among other things, the Central Issue Price (CIP), overall food subsidy regime, fiscal health of state governments and now the crucial distinction between APL-BPL-Antyodaya quotas which critically affect the PDS choices of various state governments. The data on offtake might reflect any (or a combination) of these factors. The argument can be understood in another manner too by simply witnessing the deep discomfort of the neoliberal regime towards the principle and operation of universalisation. The neoliberal state is afraid of universalisation because it creates concrete stakes for the people in the entire process and content of public policy. In this sense, universalisation is a political goal to be achieved by left-progressive forces in the country.

The point that we have consistently made remains that while an expanded universal PDS can act as the basis for reasonably food sufficient households, other entitlements of the citizens must also be enhanced and expanded to cover the wide range of issues concerning infants and under-5 children, school-going children, pregnant mothers, homeless and street-children; and urban poor. But, all other interventions would remain stunted unless an expanded universal PDS is in place.

The Cost of a Universal PDS

According to our calculation, if the government were to universalise PDS in the fiscal 2010-11, keeping 80 per cent coverage and BPL-CIP, the total annual food subsidy required (Budget Estimate 2010-11) would be Rs 97,815.9 crore (1.48 per cent of GDP). Since the present food subsidy stands at 0.84 per cent of the GDP, the additional annual food subsidy required would be around 0.64 per cent. Even if we calculate using Antyodaya-CIP and 100 per cent coverage, the total annual food subsidy required (BE 2010-11) would be Rs 147,500 crore (2.23 per cent of GDP). The additional food subsidy required as a share of GDP, even in this estimate, would not go beyond 1.39 per cent (See, Kumar and Dixit 2010 cited above for details).

If viewed together, these two calculations present an indicative ‘range’ for the possible financial commitment that the government would need to make with regard to a universal system of PDS in the country. Both the estimates are on the higher side since they assume that all households would buy 35 kg of grains.

However, a stark contrast is presented by the amount of revenue foregone by the UPA-II government. The UPA-II government has foregone an amount of Rs 414,099 crore in terms of tax revenue and other exemptions for 2008-09 and Rs 502,299 crore for 2009- 10, which amounted to almost 79 per cent of the aggregate tax collection in the fiscal year 2009-10 (RE) (GoI, 2010b) and nearly 8 per cent of the GDP of India. Further, the effective tax rate of the corporate sector, at 22.78 per cent, (in itself much below the statutory tax rate of 33.99 per cent) was significantly less than of the public sector companies. Even the said amount of revenue foregone is an underestimate since the concerned budget exercise operates only on a sample of 90 per cent companies.

Given the huge human and social costs associated with the TPDS owing to the errors of exclusion, along with serious issues of leakage and efficiency, the cost of a universal PDS is negligible. If the government could divert a part of the revenue foregone from the corporate houses this fiscal year, a universal PDS can be easily established in the country.

Recent Developments in the National Advisory Council

The National Advisory Council-Working Group on the proposed National Food Security Bill made suggestions during a meeting of NAC on 15^th July 2010. This document, unarguably, is one of most deceptively vague government press release witnessed in recent times. In its imprecision and shrewdness, it can match only the rhetoric of UPA governments on inclusive growth. The press release of the NAC summarises the recommendations:

a)      It seems that while the NAC is willing to publicly recognise the need for universal food entitlements, the current recommendation for this year only covers one-fourth of the ‘most disadvantaged’ districts/blocks that too with much debated 35 kgs per household, per month at Rs. 3 per kg. So, the achievement of an increase of 10 kgs per household (from the first draft of FSA where the entitlement was 25 kgs) has been matched by reduction in scope and introducing a novel exclusion criterion based on geographical location.

b)      The NAC release cleverly camouflages the status of the remaining districts/blocks. It begins by saying that, “coverage of universal PDS with differentiated entitlements (in terms of quantity and issue price), would progressively be expanded to all rural areas in the country over a reasonable period of time” (emphasis ours). This proposal not only leaves most categories undefined but, in effect, it also means that the APL-BPL-Antyodaya distinction would surely prevail in the non-most advantaged districts/blocks. As an alternative, it proposes that all ‘socially vulnerable groups’ including SC/STs would receive 35 kgs of foodgrains per household at Rs. 3 per kg in these districts/blocks. Others (not defined) would be guaranteed 25 kgs ‘at an appropriate price’. On top of this, the release clarifies that in these districts/blocks, “(T)here would also be a category that would be excluded based on transparent and verifiable criteria”. This comes from the proposed food security bill after so much of controversial deliberation! An even more targeted TPDS with even lesser social target base.

c)      The NAC release also states that in urban areas, eligible households (again identified by undefined planning commission criteria) would get 35 kgs of food grains at Rs. 3 per kg. So, the urban poor are completely at the mercy of another BPL survey or a planning commission exercise. Their fate is sealed because they would never fall in the most backward districts at their place of destination.

d)      The best illustration of the vague and manipulative ‘food security’ stance is the following assertion, “(E)xisting allocations for APL in the remaining districts/blocks should not be reduced”. As if there are comfortable allocations and offtake for APL anywhere in the country. The APL allocations, effectively, are non-existent in most states under the complicated and discretionary regime of TPDS.

e)      Hereafter begins the ‘amicable’ and the typically ‘inclusive growth’ proposals. This happens after all the basic principles of even a reasonable food security bill have been abandoned. The NAC wants to extend ‘comprehensive nutrition support schemes for infants, pre-school children, school children, welfare hostel students, adolescent girls, pregnant women, street-children, homeless, the aged and infirm, differently-abled, those living with leprosy, TB and HIV/AIDS etc.,’. These schemes would be supplemented with ‘community kitchens and destitute feeding’ throughout the country.

Our contention is that a simplified universal PDS with universal ICDS and Mid-Day meal would have efficiently achieved this much and more!  

f)       The final section of this release aims to work towards ‘measures for enhancing agriculture production, PDS and procurement reforms, ICDS reforms and maternity benefits, community kitchens and destitute feeding’. The working group would also develop systems of ‘oversight, transparency, accountability and grievance reddressal’.

As pointed out earlier, if the year-long debate on food security legislation in India had taken into account the agrarian distress as the starting point and worked towards transcending the ideological limitations of the current policy regime, it would have produced, at the least, a Brazil-type agrarian reforms, food and social security programme- which recognises the root causes of hunger with adequate immediate provisions but has a long term commitment from the government to deal with them.

Further, critically important issues afflicting PDS (as contained in point (f)) have been conveniently pushed to the side within the NAC discussions and, expectedly, in the proposed law. It is important to note that most of these issues here, including the state of agricultural production, Minimum Support Prices, Procurement, PDS Quotas and Allocations, Investment in FCI-Distribution and Storage facilities as well as restructuring of ICDS are a direct and often, conscious outcomes of ‘revamped’ social policy under the neoliberal regime. For instance, it is reported in media that while food grains was wasted in FCI godowns this year again, the government refused to release food grains citing subsidy considerations, despite a recommendation from the food ministry and FCI.

It is surprising that the NAC-recommended press release does not reflect any spirit of the strong social-political action behind the mobilisations around the food security issue since last few years. More distressing is to hear such discussions when the country has been witnessing high inflation fuelled by higher levels of food inflation. It would not be an exaggeration to say that the fears of the proposed FSA turning into a sham and, in turn, only used as a rhetorical cover against the opposition has almost come true.