‘Subsidies for the corporate sector are eight times that of the food subsidy’http://www.businesseconomics.in/?p=4210
Principal Advisor,Office of the Commissioners
to the Supreme Court in the Right to Food Case
Q) In the budget, the FM assured that the government would
give all the subsidies related to food security. But on the other hand,
he targeted to curb the subsidy bill to less than 2% of the GDP. Do you
think that it is contradictory?
A) It is not just contradictory;
it is very unrealistic as well. The intent of the government is quite
clear, it seeks to further penalise the aam admi, while continuing to
subsidise corporations. Remember that the subsidies for the corporate
sector are eight times that of the food subsidy. We can find money for
industry but not for the poor. That is the unambiguous message from this
budget.
There is around 3% rise in food subsidy allocation in Budget 2012-13,
taking the amount to INR 75,000 crore. Do you think it will meet the
purpose? Or, how much food subsidy is required to secure food?
The provisioning for food subsidy is not even enough to cover the
cost of operations this year and like in the previous year, the RE for
the food subsidy will be way in excess of the budgeted amount. FCI will
not be able to cover the cost of their operations and subsequently will
default in payments to the state food corporations. Ultimately, as has
been happening in the past few years, it will be the farmer who will
bear the brunt of this since the procurement operations will get badly
affected.
Q) What is your opinion on the use of ‘Aadhaar’ in the PDS
system for more efficient implementation of food security?
A) Aadhaar at its best will help curb duplication
and fraud at the household level. But it is neither a substitute for
governance, nor political will, nor the problems of targeting. Most
states, which have reformed the PDS today, have done so without touching
the last mile issues that Aadhaar will best address. It is a welcome
step that the government is finally waking up to the need for reforming
the PDS. But half measures and an absence of political will are the
biggest impediments to the reform of the PDS.
Q) What are the missing links in the budget from the
perspective of food security?
A) This budget has not factored in the food security
bill, which was the big ticket item for UPA II. There is nothing for
agriculture either, other than ticking the right boxes. Take the
provisioning for the “green revolution” in the eastern states: while the
hike in allocations by a few hundred crore may seem impressive, in
reality, it translates to less than INR 1,00,000 of investment per
village. What kind of a revolution do you expect with that investment?
Similarly, the increase in allocations of agricultural credit means
nothing unless the norms are tightened to facilitate credit to small and
marginal farmers rather than corporations. The increase in the ICDS
budget by ` 5000 crore is welcome. But remember that the total
allocation is five times less than what the Women and Child Development
Ministry had demanded as part of the ICDS restructuring.
The increase in allocations of mid day meal scheme, barely covers for
inflation. In short, there is little on food security in this budget to
comment on.
