Why Food Security Bill is Important to India

History of National Food Security Bill

Chairperson of the National Advisory Council,Smt Sonia Gandhi, wrote to the Prime Minister in 2010 forwarding the basic framework of the proposed National Food Security Bill (NFSB). She suggested a close examination of the proposal of the Ministry of Rural Development (MoRD) to replace the existing BPL survey with a socio economic census to be conducted by the Registrar General and Census Commissioner of India.
The Prime Minister set up an Expert Committee under the chairmanship of Dr C.Rangarajan to examine the implications of the proposals of the NAC and MoRD and make suitable recommendations. Socio-Economic and Caste Census was completed in early 2013.

On 5 July 2013 President Pranab Mukherjee signed the ordinance on food security which seeks to give legal rights to 67 per cent of the population over subsidised grains every month. 

The ambitious programme was launched in Delhi by Sonia Gandhi on 20th August, with the promise that it would reach two-thirds of the country’s 125-crore population and provide them with grain at subsidised rates. 

Food Security Bill got nod of Loksabha on 26th August. Total ten amendments have been approved by the Lok Sabha regarding the bill.

Why food security bill is important?

1. 22 percent of the population remains undernourished: India’s high economic growth rate in the past decade has not been fully reflected in the health status of its people, with 22 per cent of its population undernourished. 

According to the National Family Health Survey of 2005-06, 40.4per cent of children under the age of three are underweight, 33 per cent of women in the age group of 15-49 have a body mass index below normal and 78.9 per cent of children in the age group of 6-35 months are anemic. 

The NFSB is a potentially revolutionary bill that can have a huge impact on the economy. Well crafted and effectively executed, it can transform the lives of people. The salient features of the food security Law are: 

a. Legal entitlement to subsidized food grains to be extended to at around 67% of the country’s population - 90% in Rural areas and 50% in urban areas.

b. The minimum coverage, entitlement and price to remain unchanged until the end of the XII five year plan. 

2. NFSB implies major systemic reforms in the public distribution system: in its current form public distribution system is plagued by a number of deficiencies like poor identification and targeting of beneficiaries, massive leakage of grain especially from APL allocations, low margins of FPS creating perverse incentives for diversion of PDS foodgrains and general lack of accountability. 

There are several studies which have pointed out that a significant amount of the foodgrain under the TPDS misses the targeted poor. Since the basic objective of the NFSB, is to eliminate hunger and malnutrition, the distribution system must be able to efficiently and effectively deliver to the correctly identified beneficiary. 3. NFSB can reduce the foodgrain wastage to a large extent: 

According to an RTI accessed by Hindustan Times, India lost Rs. 45 crore worth of foodgrain in the past five years. The financial losses could be even higher if costs of transportation, handling and storage are accounted for. Various studies report that Rs 54,000 crore worth of grains and farm produce is wasted every year. 

A well implemented Food Security Law can preclude the food grain losses as around 200 million Indians are still food-insecure.

Major Features of Food Security Programme

1. The Bill proposes to provide wheat and rice at Rs 2 and Rs 3 per kg to about 81 crore people, while under the existing Targeted Public Distribution System only 2.5 crore Antyodaya Anna Yojana (AAY) families or about 32.5 crore persons (assuming 5 as the average household size) are getting foodgrains at these prices. Thus, population getting foodgrains at these highly subsidized prices as their legal right will increase to 67% from existing 27%. 

2. Under the Food Security Bill each entitled person will receive 5 kg of food grains per month. The poorest of the poor who have been getting 35 kg of food grains, will continue to get 35 kg food grains per household per month under AAY. 

3. The Bill has special focus on nutritional needs of women and children. The Bill proves that the eldest woman of the household above 18 years is considered the head of the household for the purpose of issue of ration cards.

 Not only that pregnant women and lactating mother will get maternity benefit of Rs. 6000/- and pregnant women and children below 14 years of age will get nutritious meals, with higher nutritional norms for malnourished children. 

 4. On the issue of redressing grievances that may arise in implementation of such a massive social justice programme, it has been planned to give an increased role for Panchayati Raj institutions and women’s self help group in programme-monitoring and social auditing. 

5. There will be provision for internal grievance redressal mechanism including call centres and help lines; and District Grievance Redressal Officers and State Food Commission for expeditious and effective.

Impact of Food Security Law on Economy

Through National Food Security Law, the world’s largest experiment of providing food grain to poor, food subsidies double from the current 1 percent to 2 per cent of the GDP. 

The recent Financial Stability Report by Reserve Bank of India states that the inflation risk remains high and a slowdown in revenue collections and higher spending on subsidies may make it challenging for the government to achieve the fiscal deficit target of 4.6 per cent of the GDP. 

It is argued that India’s trade deficit which will also be hit hard as the programme will require 70-80 million tonnes of more food grain every year. As India does not produce that much and the shortfall will have to be met from imports. 

So in short, The flagship programme of UPA can 
1. Can widen fiscal deficit 
2. Can widen trade deficit