FOOD SECURITY LAW (FSL) IN A NUTSHELL -: [GOOD POLITICS MAY DELIVER BAD ECONOMICS]
> FSL has marked change from current welfare approach to right based approach i.e. legal rights have been conferred to beneficiaries.
> FSL entitles the “covered” individuals to 5 kg /person /month of foodgrains ( wheat [Rs. 2 per kg] + rice [Rs. 3 per kg])
> Targeted population : 65% of total population [75% of them from rural and rest from urban areas]
> Antyodaya Anna Yojana (AAY) households can get extra 10 kg of foodgrains per household.
> FSL also has a provision to procure 6.5 million tonnes for other welfare programs including mid-day meal in schools and extra 5 kg to pregnant mothers & new mothers.
POINTS TO LOOK ON :
- Cost of implementing Food Security Law
- Extra cost to set up new infrastructure and bureaucracies
- Added pressure by political leaders to protect some “special” group
CAPITAL NEEDED : (fiscal cost of implementing bill)
- It is estimated that cost of implementing FSL law will be about Rs. 1,24,502 crore (includes minimum support price, handling, storage and distribution costs for 2013-14.
- Foodgrains required for total FSL implementation – 61.2 million tonnes.
- Cost of implementation is estimated to rise by 10% every year.
CRITICISM/ DEFECTS
> It will assume a form of “incremental” food subsidy.
> Extra money required to run "District grievance redressal offices" (DGROs)
> Distribution implications – Increased load on Targeted Public Distribution System (TPDS)
> Possibility of misclassification of the existing beneficiaries which may not be necessarily poor.
> Overlooked the cost of intrastate transportation of food grains
> Law doesn’t envisage concrete methods to store foodgrains as current storage facilities are insufficient to handle large amount of foodgrains.
> Identification problem of beneficiaries which may lead to grandfathering of existing beneficiaries leading to increased cost.
FSL : Envisaged Operational Procedure
- Step 1. Central pool maintained by Central Government
- Step 2. Transported to designated depots in Each State as per allocations
- Step 3. Intra-state allocation and delivery to Fair Price Shops (FPS) by state government
- Step 4. Local authorities responsible for implementation and monitoring
Some Issues Involved with Passed FSL
- Situation at the time of crisis : Clause 52 of the FSL states that Centre and State shall not be liable in case of there is shortage of foodgrains due to war, flood, drought, fire, cyclone, earthquake or any act of God
- FSL is a highly centralized model, neglecting state level models (decentralized one)
- Decentralized Procurement System (DCP) [at state level] has been totally neglected which contributes to Targeted Public Distribution System [at central level].
- Centralized procurement has been identified with many defects
- Strengthening of the existing ineffective Food Security Complex
- Unclear provisions under Food Security Allowance
- Cereal-centric approach ignoring protein rich items
- Missing income approach to food security : Many developed countries have adopted food coupon system instead of physically handling of grains which increases economic access to food.
OPERATIONAL ISSUES IN THE FSL
- Volatility in Production due to external shocks of weather & international market.
- Volatility in the prices of wheat and rice.
- Concentrated Procurement due to heavy production of rice and wheat in certain pockets of India. So will need adequately equipped mandis/procurement centres at such places.
SOLUTIONS FOR TPDS
- Major issue of fake ration cards which can be solved by computerization & use of hologram-enabled techniques.
- Key reform in this has been proposed with linking of Aadhar Card with distribution systems.
- Standing committee has recommended to set up Public Distribution System Network (PDSN).
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