India’s food bill is nothing but a political move to woo poor in blatant re-election bid
India’s corruption-tainted federal government may just have found a way to resurrect itself in the eyes of the country’s largely poor electorate.
Ahead of the 2014 federal elections, the Congress Party-led United Progressive Alliance government is preparing to introduce a Food Security Bill that seeks to provide cheaper food grain to more than half of India’s population of 1.2 billion people.
The bill promises subsidised food grants for 75% of India’s rural population and 50% of urban households. It also includes free cooked meals to children under 14 years of age and those classified as destitute.
On the face of it, the Food Security Bill seems almost obligatory. Despite India’s economic growth in recent decades, 44% of its children under the age of five are underweight and 65 children die each day of malnutrition. In all, 21% of the population in India, home to the world’s largest number of poor people, are undernourished.
The bill is likely to win the support of all political parties when introduced to parliament later this year, observers say.
“None of the opposition parties can refuse to support a seemingly pro-poor measure openly,” Chintamani Mahapatra, professor of political science at New Delhi’s Jawaharlal Nehru University, told Asia360 News.
But at what cost? India’s economy is already battling a bad year-and-a-half and the government is already operating under a fiscal deficit higher than most Asian countries. Economic growth is expected to come in at 6.5% or lower in the current fiscal year, thanks to a combination of the European debt crisis and India’s own lack of reforms.
Experts suggest that the Food Security Bill could worsen the fiscal bleeding. India’s food subsidy spending would balloon to an estimated 950 billion rupees (US$18 billion) in the first year of the scheme, up from around 673 billion rupees now. The government will also need an investment of 1.1 trillion rupees to boost farm output over the next few years.
India’s fiscal deficit is expected to overshoot the government’s official target of 5.1% of gross domestic product for 2012-13. Economists say that India cannot sustain such a high fiscal deficit for long.
Financial experts say the government can find resources to offset the additional cost burden of the Food Security Bill by cutting down or ending oil price subsidies. But it has been demonstrated umpteen times that the government is unlikely to do that, as it would not go down well with its voters.
“Measures that should have been decided on grounds of economic policies are being worked out on the basis of political calculations,” said Jawaharlal Nehru University’s Mahapatra.
In fact, many believe that it is the emotional appeal of a bill that talks of hunger alleviation that is driving the Congress Party’s move.
The feeling amid political analysts is that when nothing seems to be working in the Congress Party’s favour, even a moderate success in what will be the world’s largest experiment of providing rice and wheat to the poor, could help the party retain power at the 2014 elections.
The accusation that the government is playing politics with hunger also stems from its recent record.
Last December, the government dropped plans to open up the multi-brand retail sector to foreign direct investment (FDI) the moment some of its political allies raised objections, prompting speculation that it may be more concerned with shoring up support than the nation’s progress.
The investment liberalisation plan would have allowed global firms such as Wal-Mart and Carrefour to bring their expertise in supply chain management into the Indian market, where inefficiencies in the downstream segments of the food supply chain are rampant, threatening to undermine self-sufficiency and perpetuate malnutrition.
Inefficiency in the tomato business, for example, results in as much as 20% of tomatoes rotting in transit, while the price for consumers is marked up by as much as 60%, according to a December analysis in the Wall Street Journal Asia. It is likely that the continued government subsidies contained in the Food Security Bill will only lead to further market distortions, the report added.
Flawed economics is not the bill’s only shortcoming. Praful Bidwai, a social science researcher and human rights activist, said that the most deplorable aspect of the Food Security Bill is that it “marks a retreat from the concept of food security and the state’s duty to feed all its citizens”.
The bill particularly failed in its social duty by excluding many pertinent social groups, like truant children, he wrote in a January essay called “The Bill Must Not Pass”. School dropouts were deserving of generous food entitlements because grinding poverty at home was exactly what forced them out of school and into child labour in the first place, he argued.
“A good food security law should have provided for pensions to the aged, who have little or no earnings with which to buy food. The bill fails to do that,” he wrote.
“It also contains nothing by way of price guarantees for India’s impoverished farmers, over 250,000 of who have committed suicide since 1995, and who are among our most food-insecure people,” he added.
But what really exposes the hollow political move that hides behind the garb of social welfare, critics say, is Clause 51 of the Food Security Bill.
The clause absolves the federal — and also state governments — of any responsibility, including supplying food or paying compensation, in case of “war, flood, drought, fire, cyclone, earthquake or any act of god”.
Aren’t those the precise conditions, critics ask, in which food supply becomes crucial to the survival of many people?
All things considered, critics of the Food Security Bill say it comes across as a poor joke on the concept of food security and hunger alleviation. It neither offers good economics nor fulfills the moral requirement of a government to provide for its people’s fundamental survival needs.
The Food Security Bill, it seems, is all about making expensive promises for political gains. AR