Food Security Or Economic Insecurity?

The most prominent and all-encompassing discussions over the past few months have been around the newly enacted Food Security Bill. From the political circles to the common man on the streets fighting for his survival, every view, whether in favour of or against the bill, has taken up plenty of air time and reams of paper in the media circles. A pet bill of the Congress President Sonia Gandhi and what is considered to be a game changer for Rahul Gandhi’s political career, the bill was passed into a law despite the vociferous resistance of most in the opposition.

An interesting observation to make here would be that though most in the opposition weren’t in favour of introducing the bill in the last stages of the Parliament session before we go into the General Elections, no one was actually willing to oppose it when it finally came to the table. Who would want to be looked upon as standing in the way of a bill that is meant to ensure food for a large mass of the Indian population, particularly those below the poverty line? The best vote bank politics at play!

The CAD (Current Account Deficit) is way above manageable levels, we are staring at a budget deficit in excess of six per cent, and in the wake of all these developments, the rupee is hitting a lower depth with nearly every passing day. At 68 to a dollar, the INR is among the worst performing currencies today. Like this was not enough, our GDP growth is presently at its lowest level in many years, inflation is far from coming under control and our foreign exchange reserves are under tremendous pressure.

In a scenario like this, in my opinion, it is indeed very unfortunate that the ruling government has hurriedly put through such an ambitious bill which is clearly not in the interest of the nation. This hurry to push the bill ahead clearly reflects the desperation of the ruling party to hold on to the seat of power in the coming elections. But obviously, the cost of Rs 125000 crore, which is planned to be spent for providing food security, is going to be borne by the common man and not by those in power.

While introducing the bill in the Parliament, Sonia Gandhi made it out to be a historic event for the country. According to her, it was indeed a great moment for the nation, as it was about to witness the passage of a bill considered to be the biggest welfare measure that would ensure social security for a large chunk our population. According to the paperwork, nearly 67 per cent of Indian people would benefit from this scheme. Every person covered under the scheme will get 5 kg of wheat at Rs 2 per kg, 2 kg of rice at Rs 3 per kg and 2 kg of cereals at Re 1 per kg.

The Congress President surely did a good job in spelling out the benefits of this bill, but chose to remain silent on the cost that the national exchequer would need to bear to make this a reality. The maths around this is pretty simple. The government will procure the commodities from the farmer at Rs ‘X’ per kg, and on top of that, will spend close to Rs ‘Y’ per kg to transport, store, preserve and distribute these. It will then provide Rs ‘Z’ per kg as subsidy and distribute the same to the beneficiaries. Obviously, there would be a sum of Rs ‘C’ per kg that will be induced into this whole arithmetic in the form of leakage, corrupt practices and improper facilitation of this scheme.

This concern has been rightly pointed out by Swaminathan S. Anklesaria Aiyar in an editorial (in the Economic Times). “It is silly to procure wheat at Rs 13 per kg from a farmer, spend Rs 10 per kg on inefficient storage and sell it back to him at Rs 2 per kg. Why not just give the farmer cash instead?”

I am not even sure how much of the food will actually reach the poor who are sought to be covered under this bill. A major part of it will definitely find its way into the hands of the "well connected" traders/hoarders, who in turn, will either recycle the quantities back into the system or possibly smuggle it out of the country and make themselves richer.

Such efforts to weed out poverty have been made right from when the then Prime Minister Indira Gandhi came up with the 'Garibi Hatao' slogan almost 40 years ago. Even after all this time, the same party’s government is yet looking for ways and means of achieving its objective. In these 40 years, we have experienced the failure of such schemes over and over again, and it is greatly surprising that we have not been able to learn from our mistakes in all these years. This drives me to the thought that these are deliberate and planned mistakes engineered to rob the exchequer for personal gains.

A scheme such as this will also serve to impact our society adversely. The whole world is envious of the young population that India enjoys today, and has been discussing the benefits of the “demographic dividend” that our economy is set to reap. This envy is the result of the "potential" competence and strength that the youth of our country can provide to rev up the global economic engine.

However, our own government seems hell bent on killing this potential by providing wages without work and food security without any contribution. Such a scheme can altogether convert the potential demographic dividend into a serious global liability. If we get our youth hooked onto the idea of free wages and free food for the next 20 years, it is a no brainer that when the country starts to age, our government will have no other option but to continue to borrow to feed an unproductive and ageing population. If this happens, the Food Security Bill will turn into a curse on this country in the future.

India has historically been a resource-rich nation, which offers tremendous opportunities to those who want to seize them. The Indian population as a whole is not poor. This is amply evident in the way gold is being imported into the country. The credit for this goes to the masses that make up the Indian population. Growing literacy and a better standard of living in the country is a testimonial to the ability of our population to grow inspite of the adverse circumstances and obstacles being laid by our government. Instead of leveraging this ability, the government is trying to kill it by making the masses dependent on alms thrown by the government through such bills. Again, I suspect that this is being deliberately engineered to weaken our society and to secure the interest of a few who want to rule this country at any cost.

Many of our top ministers and members of the Planning Commission are rated as among the best economists in the world. India has also had the privilege for producing a Nobel laureate in the field of economics. I am surprised that despite so much of economic wisdom available at our disposal, we are blinded and cannot see the impact of a calamity which we are bringing onto ourselves by permitting such a bill to come to pass. Maybe even these experts have been "hired" by the government to ratify its devious plans and deprive our nation of its wealth and prosperity.

It is time for Corporate India and every literate Indian who understands the impact of such actions to join hands and save this country before it is too late. Like every citizen of this country, I would personally wish to see India graduate to being a “developed” country from an "emerging" or "developing" status. But I am afraid that if we do not act now, we will soon be a "bankrupt" nation.