Lots of you must be watching the master move by the Congress Supremo to introduce the Food Security Bill in the Parliament. To add more firepower they have lined up Amartaya Sen a noble laureate to support of the bill. Mr Sen has given integrity certificate to the Prime Minister in the past also. See this news report by Reuters here. The Prime Minister has returned the favor in the past by honouring Mr Sen. Quid pro quo amongst old friends. Everybody is happy and the Indian intelligentsia applauds two of the greatest living economists from the sidelines. Everything is hunky dory.
At the outset if you are a rational intelligent Indian you will side with Mr Sen and MMS. After all you cannot go wrong with one Noble Laureate and an economist credited with India’s growth story in the last two decades on your side. However the issue is lot more complex than what it seems. So let’s look at the issue in greater detail. The basics of Food Security bill is as follows (more details here):
• Legal entitlement to subsidized foodgrains to be extended to at least 75% of the country’s population – 90% in Rural areas and 50% in urban areas
• The priority households (46% in rural areas and 28% in urban areas) to have a monthly entitlement of 35 Kgs (equivalent to 7 Kgs per person) at a subsidized price of Rs. 1 per Kg for millets, Rs. 2 per Kg for wheat and Rs. 3 per Kg for rice
• The general households (39% rural and 12% urban in phase 1 and 44% rural and 22% urban in final phase) to have a monthly entitlement of 20 Kgs (equivalent to 4 Kgs per person) at a price not exceeding 50% of the current Minimum Support Price for millets, wheat and rice
If you have shopped for your grocery in the recent times then you will have a good sense of how low the proposed prices in the Food Security Bill are. 1 kg of packaged rice in Bangalore is Rs 32/-. See the link of this grocery website to see the prices of other items that the govt wants to provide in the Food Security bill. Now if you are a smart guy then you can clearly understand the impact of the Food Security Bill on the Indian Farmers. In the long run this could destroy the foundation of food production in the country and we could become like Singapore or Dubai which imports all its food items.
So why is the Govt hell bent on passing such a law? For the same reason that they passed schemes like NREGA. Some political intellectuals claim that Congress won the last elections because of bribing the rural poor with scheme like NREGA etc. Read this story by India Today to understand the background. And there lies the truth. 2014 is going to be an important election as it will decide which path India takes. Will it continue to fuel a model where National schemes bribe the rural poor and keeps them un-productive or will it go back to growth fuelled model of the earlier decade. Only time will tell.