India’s Food Security Plan Met With Skepticism

India’s Food Security Plan Met With Skepticism
July 08,2013

NEW DELHI, INDIA — India's government is moving forward with a landmark measure that will provide highly subsidized food grains to more than two-thirds of the country's 1.2 billion population.

With food inflation hitting 8.25 percent in May, New Delhi resident Geeta Kashyap bargains even harder at the market to keep costs down. As food prices rise, she is left to wonder how the poorest in India can survive.

“Everything is so expensive now, diesel is expensive, gasoline is expensive, food is getting expensive - tomatoes that used to be 20 rupees a kilo are now 70 rupees a kilo - how can someone eat?” asked Kashyap.

It’s a question the Indian government wants to answer with the food security program - aimed at guaranteeing a majority of India’s population five kilograms of rice, wheat and coarse cereal a month at extremely cheap rates of one to three rupees or a few pennies per kilogram.

High rate of malnutrition

The measure is crucial in a country with a quarter of the world’s hungry poor and where one out of three children is said to suffer from malnutrition - a rate higher than sub-Saharan Africa.

The food security ordinance also will provide free meals to poor children and pregnant women.

While the measure looks to expand food subsidies to 50 percent of India’s urban population and to 75 percent of the country’s rural population, many say that unless the government fixes the flawed public distribution system, its unclear just how many people can benefit.

Bharat Ramaswami with the Indian Statistical Institute was one of 45 economists from around the world who signed an open letter to ruling Congress Party leader Sonia Gandhi in 2011, urging the central government to consider alternative modes of subsidy delivery, such as direct money transfers, instead of relying on a public distribution system that is beset with problems.

“There are huge amounts of money to be made illegally by diverting this grain to the market, and that’s been a big source of both leakage and corruption, and just outright fraud,” said Ramaswami.

Concerns about public distribution

Ramaswami said that anywhere from 40 to 50 percent of the value of the subsidy is lost to leakage.

He is not alone. Many who frequent this market in the Indian capital, like Sushil Kumar, are skeptical highly subsidized grains will make it to those who actually need it.

“What store owner is going to give rice for 3 rupees a kilo? How will a person have proof that he is poor and entitled to these subsidies. He needs a card to show to a shop owner,” said Kumar.

Others, like Trishna Garg, say the Cabinet approved the bill and the president signed it into ordinance at a time when the Congress party is eager to get support ahead of next year’s elections.

“They did this for the votes, the government doesn’t really do anything, but during election time, they say, this will be cheaper, but nothing happens,” said Garg.

Others, meanwhile, have questioned how India can afford the cost of a food subsidy program that will rise to at least $21 billion. It’s an issue that likely will come up when the ordinance is debated in the monsoon session of parliament.