Politics of poverty
The Food Security Bill is a classic case of putting the cart before the horse. It increases subsidy on food grain by over Rs 33,000 crore immediately...
The best model State in terms of welfare was the Soviet Union. It collapsed not because of a failed ideology, but under heavy unaffordable expenses on its commitment to provide food, commodities and shelter to everyone
The Food Security Bill is a classic case of putting the cart before the horse. It increases subsidy on food grain by over Rs 33,000 crore immediately and progressively in the next five years to about Rs 179,000 crore while almost eliminating subsidy for agriculture. The US did not do this despite the WTO, but India, which believes in action without a perspective, has done it.
At the same time, there is a positive side unwittingly to the Bill. For the first time since Independence the Government has officially accepted that there is hunger in the country and people die of it. Else, officials always state that deaths are due to “malnutrition” and not starvation. Additionally, there is an admission that inflation has gone through the roof. People are unable to buy food at high prices. It also accepts that the Government has virtually not acted to keep the food prices under check.
The Bill also admits that the number of poor is 67 per cent of the population – 81 crore and not the various figures shelled out by the Planning Commission which range from 26 per cent to 36 per cent or a bit more liberal ones at 40 and 50 per cent. The Arjun Sengupta Committee, however, had put the figure at 77 per cent.
Undeniably, food remains the centerpiece of politics, as India is only a few notches above some sub-Saharan countries in the Global Hunger Index. Indeed, it pays dividend to keep the masses in abysmal poverty. A lot can be promised as freebies - laptops, TV sets, saris - a dreamland could be created to lure votes.
The Bill virtually censures all Governments that have ruled this country since 1947. There has been complete failure by all. During the past 66 years, almost an additional 67 crore more people have slipped into abysmal poverty. The number of poor has more than doubled with the population at the time of Independence being 34 crore.
Additionally, the Bill is a sure prescription for the impending collapse of Government finances. It has taken upon itself to be legally obligated to provide food grains at the fixed rates of Rs 3, 2 and 1 without ensuring whether it would be available to it at affordable rates. The Government would play into the hands of the food mafia, which include some large corporates, both domestic and multi-national.
The nation shouldn’t be surprised if the Government is forced to buy food grains at high prices and sell at the lowest it has fixed. This would open up new routes for scams, as the poor, which constitute the largest vote bank, would need to be fed. Thus, the motto of feeding them and getting the votes is natural. But at what cost? Obviously, this is not a problem for a political party which wants credit at public expense.
Sadly, nobody wants to learn from recent history. The best model State in terms of welfare was the Soviet Union. It collapsed not because of a failed ideology, but under heavy unaffordable expenses on its commitment to provide food, commodities and shelter to everyone. Entitlements kept the citizenry happy but eroded the nation’s financial base.
What India is doing today reminds one of Indira Gandhi’s famous slogan “garibi hatao”. Are we putting the clock back to 1971? Maybe, but Indira didn’t raise entitlements. She ensured a Green Revolution to guarantee food availability and stopped imports of rotten wheat and rice from the US. She made people in large parts of the country less dependent on the public distribution system (PDS). And, in the initial days, she was able to check spiraling prices.
Successors of Mrs Gandhi should have learnt something from her; that the country’s path to better days was ensured through investment and research in agriculture. Chairman of the Agricultural Costs and Prices Commission states: “We shall have to change the rules of the game”. The farmer cannot be paid less and asked to subsidise the economy. The present minimum support price is almost 30 per cent less than what he invests in each of the crop.”
Since 1991, public investment in agriculture has drastically fallen and private corporate investment has increased in a selective manner. Today, corporate entities have emerged as the biggest zamindars (landlords). Their profits are soaring and prices of food items are rising. The recent National Spot Exchange (NSEL) scam has exposed betting in food items, something the UN agencies had warned about years ago.
Yes, Manmohan Singh’s market has failed the poor. The middle class has been pulled down to the edge of poverty line. Massive entitlement without proper mechanism to deliver would only drain public finances. Surprisingly, even the Opposition did not object to the Bill. Perhaps, rightly as it too cannot risk losing votes on a sensitive issue.
The impending dangers are far too many. Even now, the Government doesn’t have any control on prices. Under compulsion of buying food at a high price and supplying it at the lowest price, it has burdened all future Governments with enormous unwanted expenditure. It will be very difficult to undo the damage by withdrawing it as the political fallout would be just too intimidating.