Understanding National Food Security Act, 2013
- Part 3 -

Sandeep Thoudam *

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Cost of implementing NFSA

PDS is highly subsidized in India and this has put a severe fiscal burden on the government. The food subsidy cost for implementing NFSA is estimated at Rs 124502 crore for the fiscal year 2013-2014. The cost is estimated to increase to Rs 14092 crore in 2014-15 and Rs 157701 crore in 2015-2016. The incremental food subsidy over and above the existing TPDS, which is the additional cost to the budget, is estimated at Rs 23951 crore which is equivalent to 0.2% of our country GDP. The fiscal dilemma may not end here; three important factors can possibly magnify the financial potential of the act.

Firstly, the implementation of the act can raise the cost considerably if the implementation of the act includes "grandfathering" of the existing beneficiaries, as of now many schemes are not grandfathered but if there is political pressure to protect the existing beneficiaries, then it may create extra burden to the exchequer. Secondly, the government policy of procuring unlimited quantities of wheat and rice at MSP is always higher than the required quantity of food grains. For instance, in the last ten years, the procurement has always been 40% higher than actually required.

Thirdly, if the implementation of the NFSA required merging of the current classification under the TPDS with the new identification, there will be lots of miscalculation and may entail additional implication.

The financial problem can also expand tremendously if one considers the miscellaneous aspect for the successful implementation of the act. Even though the states are allowed to rearrange their existing District Grievances Redressal Offices (DGRO) and state food commission for the effective functioning of the act, still the cost of reorganising and working of this institution will be high.

The total amount including intra state transportation and cash benefit to pregnant women and lactating mother is estimated to be Rs 20760 crore and from these Rs 8760 crore will be incurred by the state and the remaining will be shared between the centre and the state. The problem doesn't end here and it can also be seen in some issues stated in the act. The act fails to provide any expenditure to be incurred for a new system of identification, establishment of institutionalized licensing for Fair Price Shops, setting up of vigilance committees to monitor the implementation, funds to be provided by the central government in case of short supply of food grains etc.

Limitation of the act

The first and foremost issue that's need clear credentials is the problem of the beneficiaries. The act doesn't clearly decide who the beneficiaries are and who will not get the subsidized food grain. Under the NFSA the responsibility of selecting the beneficiaries is given to the state government but most of the state government are clueless on how and on what basis the identification should be done.

It is always an uphill task and the possibility of inclusion and exclusion error remain to a great extend. It is estimated that in the BPL list 61% of the eligible population were excluded while 25% APL household were included in the list. In this context the state governments has got two options to identify the target population, the BPL census of 2002 or the Socio Economic Caste Census (SECC) of 2011.

The BPL census of 2002 is manifested with errors mainly due to the design of the census and the limitation imposed by the Planning Commission. It will be unwise to use this data for the selection of beneficiaries as it is a decade old and has too many flaws. On the other hand SECC is a recent data and was designed after a prolonged consultation with various stake holders including state government, in terms of design and methodology of identification.

This data seems to be the right choice for the identification but it has been put aside. The SECC report on schedule caste and schedule tribe is found contradictory to the population census of 2011. And as SC's and ST's population are the most likely to be poor, there is a fear that they may be left out from the ambit of the act. The SECC report is available to both the centre and the state but most of the state government is opting for the BPL census of 2002.

The basic objective of removing hunger and malnutrition also shows lacklustre. The act doesn't provide any food guarantee to the children who are not at the school nor pension for the old aged. According to the Indian Council of Medical Research (ICMR) an adult requires 14 kg of food grain per month and children 7 kg per month. However the act provides only 5 kg of food grain. It is been argued that the subsidized food grain will eventually provide purchasing capabilities for the poor people.

But sadly, this will not increase their purchasing power as most of their income will be spend on purchasing food grain from the open market. The mere availability of food grain may not always lead to the sufficient house hold consumption if people can't afford to buy it. The consumption of food grain will help in the intake of calorie but it will not help in achieving all the nutrients required by the body.

Almost every year approximately 22000 maternity death occur in our country mostly because of iron deficiency and related anaemia. As per the latest ICMR report, 87% of the pregnant women and 75% of the children below the age of five suffer from iron deficiency anaemia. Above this, vitamin A and iodine deficiencies are also big challenges to eradicate malnutrition.

The act also fails to address the importance and needs of the sanitation which it is the core problem of malnutrition. Diarrhoea claims about 13% of the child mortalities and it is also found that access to clean toilet is the most significant when explaining declining nutrition in India's hunger state. In this background, many feel that this act will not solve the problem of malnutrition or providing extra food grain to the pregnant women will reduce the maternity death.

Serious implication can also been seen in terms of distribution when compared with the previous scheme that is already in progress. The act divides the beneficiaries into "covered "and "uncovered" and because of this division, some beneficiaries will gained highly, some moderately and others losing to a great extend. From the total population of APL, 71% will be placed under covered category and they will be getting 5kg of food grain instead of 3kg. The remaining APL will move out of the covered category and will not benefit anything.

They have to obtain the grain from the open market and this will led to the tremendous increase in their expenditure. The BPL families who were getting 7kg of food grain will be getting 5kg as of this act. There will be a loss of 2 kg and if seen in context of expenditure this loss overshadows the gain of 5 kg. In broad context, when we consider the overall current population under the TPDS, 46% will gain up to a great extend, 14% will remain in a moderate condition and 40% will be worse off.

Conclusion

The idea and motive behind the enactment of NFSA needs to be thoroughly appreciated but when one looks at the practicability and the reality of its application, there is high doubt about its success. Until and unless the loop holes are amended, the act will have little impact in achieving the target purpose. Even with serious complication, the farming sector is able to provide the required quantity of food grain but it is to be seen whether the agriculture community is able to sustain this production in times to come.

The fast growth rate of population is also having serious consequences when compared with the growth rate of production. And this has instilled a fear among the people that food might not reach the poor people. This facet can be greatly minimized if the government holds a tight grip in the functioning of the PDS. Above this, there is also lack of clarity in specifying some of the requited point postulated in the act (discussed above). If the government takes keen interest and make the necessary changes for the smooth functioning then there will be no problem in the successful implementation of the act.

Concluded...