108 SuStainability
Adnan Shakeel1*
Department of Geography, Faculty of Science, Aligarh Muslim University, Aligarh,
Uttar Pradesh, India
*
Corresponding author: adnanresearch@gmail.com
1
Recent tRendS in the debate on
india’S national Food SecuRity act
(nFSa) – 2013: tRagedy oR tRiumph?
abStRact. Present article follow up the recent debates that is being discussed in the
country with respect to the National Food Security Act – 2013. Present article is based
on the secondary sources of information collected through various books, magazines,
journals, newspapers, government and non-governmental reports. The purpose of
the article is to trace the discussion among various economist, planners, researchers
and policy makers in order to analyse whether National food Security Act is a triumph
for those who are in desperate need of it (poor and destitute), or a tragedy for those
officials speaking against the Act. The main emphasis of the article is to discuss the cost
of implementation of NFSA because it was believed that after its implementation it will
put heavy burden on the government exchequer due to subsidies provided under it.
Article also examines the challenges related to Food Corporation of India with respect to
procurement, storage and distribution of foodgrains. Moreover, article also discusses the
NFSA with respect to the Integrated Child Development Scheme, its affect on small and
marginal farmers of the country, challenges related to public distribution system.
Key woRdS: National Food Security Act-2013, Nutritional Security, Public Distribution
System, Food Corporation of India, Integrated Child Development Scheme, Cash and
Food Transfer.
citation: Adnan Shakeel (2018) Recent Trends in the Debate on India’s National Food
Security Act (NFSA) – 2013: Tragedy or Triumph? Geography, Environment, Sustainability,
Vol.11, No 2, p. 108-124
DOI-10.24057/2071-9388-2018-11-2-108-124
intRoduction
After India’s independence in 1947 the major
emphasis of the Governments both at the
Central and the State level was to increase
the foodgrain production for fulfilling the
growing needs of its rapidly increasing
population (Hashmi and Shakeel 2014). In the
early 1960s the Government of India came
up with seed-fertilizer technology known
as Green Revolution. MS Swaminathan also
known as father of Green Revolution in
India has been credited for paving the way
to success through introducing and further
developing the biotech seeds in Indian
agriculture especially of wheat. Fortunately,
the Green Revolution came out as a big
success leading to increase in foodgrain
production of India from 82.02 million
tonnes during 1960-61 to 108.42 million
tonnes during 1970-71. The availability of
foodgrain which was 408.22 grams per
head per day in 1966 increased up to 468.77
grams per head per day in 1970 and later it
risen up to 472.6 gram per head per day in
1990. Warding off doomsday predictions of
hunger and famine, India declared itself as
a food self sufficient and self reliant country
because of Green Revolution in the sixties,
where we hardly had to resort to foodgrain
imports except occasionally (Swaminathan
and Bhavani 2013).
The seeds for providing food security to
its people were already sown in the form
of HYVs but its roots started spreading
when the Government of India came up
with Public Distribution System (PDS) for
providing food to the needy in those areas
where domestic agricultural production was
low or nil. The main function of PDS after
independence till 1992 was to distribute
foodgrains to the urban scarcity areas and it
prevented the rise in foodgrains prices and
ensured access to food especially to urban
consumers. Private trade was considered
exploitative and the PDS was considered as
countervailing power to private trade (Desai
and Vannemam 2015). But in the opinion
of some scholars PDS came out as a big
failure because of its poor implementation,
corruption and black-marketing. There are
studies showing that the benefits which
PDS was entitled to provide is not reaching
to the poor and needy and the objectivity
of food security through poverty alleviation
remains unachieved (Radhakrishna and
Subbarao 1997; Jha et al. 2013). Later, some
big changes were too made in PDS but the
situation remained more or less the same
at all India level though in some states PDS
proved to be good in alleviating people
from food insecurity such as Chhattisgarh,
Tamil Nadu and Kerala (Puri 2012; Paolo and
Vandewaalle 2011; Bathla et al. 2015).
The facts related to food and nutrition
security prior to the implementation of NFSA
portrayed a very dismal picture. The child
malnutrition and micronutrient deficiency
in India was among the highest in the world,
it was even worse than many much poorer
countries. About 62% of pre-school children
were deficient in Vitamin A leading to an
estimated annual 330000 child deaths. More
than 60% of the pregnant women, 63%
breast feeding mothers and 70% pre-school
going children were anaemic (Galvin 2012).
RECENT TRENDS IN THE DEBATE ...
According to NFHS-III (2005-06) at aggregate
level the proportion of adolescent girls
and boys in between the age of 15-19
suffering from anaemia was 56% and 30%
respectively. At disaggregate level 2% of
adolescent girls were severely anaemic
followed by 15% and 39% moderate and
mildly anaemic respectively. During NFHSII (1998-99) the condition was more or less
similar because 2%, 18% and 41% of the
adolescent girls were severely, moderately
and mildly anaemic, showing that there has
not been much change in the trend (Dureja
2016). The Government of India came up
with National Food Security Bill which later
became an Act in 2013 for providing food
to its people through its various schemes
such as Targeted Public Distribution System
(TPDS), Mid Day Meal Scheme (MDM) and
Integrated Child Development Schemes
(ICDS). Moreover, Mahatma Gandhi National
Rural Employment Guarantee Act (MNREGA)
too was launched by the government
to provide jobs to the unemployed for
increasing their purchasing power because
it is believed that in India the problem of
food security is not because of unavailability
of food but it is because of people’s inability
to purchase the available food due to low
income.
The government started to play on the front
foot meaning thereby, with the help of its
different department and ministries it is now
administering a series of programmes that
have direct and indirect influence on hunger
and food insecurity. Remarkably, ICDS
the most important wing of the Ministry
of Women and Child Development have
initiated the work for the improvement of
the health and nutritional status of children
and expecting mothers by providing bundle
of benefits such as additional nutrition,
health inspection, immunization, referral
services etc under the aegis of NFSA
through a group of cutting edge workers
at the Anganwadi Centres. Moreover, the
mega PDS a monumental programme of
Ministry of Food and Civil Supplies also
works under the aegis of NFSA for providing
food at an affordable and subsidised rate
to eligible households while Ministry of
Rural development execute MNREGA with
objective to ameliorate the household
109 SuStainability
Adnan Shakeel
110 SuStainability
GEOGRAPHY, ENVIRONMENT, SUSTAINABILITY
income for better access to food. Another
programme which needs to be emphasised
is Mid Day Meal Scheme (MDM) being
implemented under the Ministry of Human
Resource Development is the world’s largest
school feeding programme providing food
to children upto middle school (class 8th)
(Mishra 2016).
Now the enquiry is, even after the
implementation of NFSA and the goals for
which it has been applied has been achieved
or not. The desire for providing food to each
and every person of the country has been
met or not. The International Food Policy
Research institute (IFPRI) shows that India
is suffering from alarming hunger, ranking
97th in the global hunger index out of 118
developing countries under study in 2016,
India with respect to human development
index ranks 130th in 188 developing
countries in 2015 and country’s rates of
malnutrition and starvation related disease
and death remains staggeringly high.
India ranks below several countries in subSaharan Africa such as Cameroon, Kenya
and Niger. The countries like Chad, Ethiopia
and Sierra Leone have better position than
India even though the per capita income in
these countries is much lower than India.
Neighbouring countries such as Sri Lanka,
Bangladesh, Nepal, Myanmar and China all
are ranked above India. The Rapid Survey in
Children shows that 38.7% children under
the age of 5 are stunted, 19.8% are wasted
and 42.5% are under weight. According to a
survey 38.7% of the children under the age
of 5 are suffering from stunting followed
by 19.8% children suffering from wasting
and 42.5% are under weight. The current
data shows that from among the total,
about 21% of the child deaths across the
world are reported in India (Mishra 2016).
India after the First Demographic Divide of
1921 has made a commendable progress
in declining infant mortality rate but inspite
of this nearly 760000 children die annually
because of malnutrition, undernutrition and
disease (Kumar 2016). NFSA faced severe
criticism because immense importance and
reliance has been given to already existing
institutions such as PDS and ICDS which
have established history of ineffectiveness.
02 (12) 2018
obJectiVeS oF the Study
The main objective of the present article is
to track the debates and discourses from the
time when National Food Security Bill came
in existence till the date it became an Act.
Article also examines the development that
took place even after the implementation of
the Act. The NFSA was severely criticised by
various scholars, planners and policy makers
thus article tracks the debate on social,
economic and political grounds. Moreover,
the article discusses NFSA as a triumph and
tragedy both, discussing whether it has
fulfilled its objective of providing food to
the people and making them food secure
followed by discussion in the repercussions
and failure of NFSA with respect to black
marketing, corruption and inefficiencies.
The article tries to analyse whether the cost
incurred in the implementation of this Act
is a wasteful expenditure or an investment
in the country’s future. Whether NFSA
will prove to be an asset for the poor and
destitute or it will become a liability on
the nation’s economy. It also discusses the
queries which have been arisen out due
to the implementation of NFSA like would
subsidized foodgrains solve the problem
of malnutrition? Is there any better choice
other than food transfer in order to help the
poor such as through investing in education
and health or through cash transfer? Is the
amount of subsidy provided to such a large
number of people affordable? Should a
country like India continue to invest money
on the highly flawed PDS system?
mateRialS and methodS
Present article is basically a review article
based on the secondary sources of
information collected through various
books, magazines, journals, newspapers,
government and non-governmental reports.
ReSultS and diScuSSion
cost of implementation and Subsidy
burden of nFSa
For the sceptics, Nation Food Security Bill
before it was passed by both houses of
parliament was and Nation Food Security
Act after its implementation is the most
debated piece of discussion in years. The
most important dimension of discussion of
NFSA was and is mainly around the issue
of the cost of its implementation and its
impact on the nation’s economy. The cost
of implementation of NFSA is estimated
differently by various scholars. The first
estimate incorporated in the study was
given by Bhalla (2013) and his estimation of
the cost was 44.0 billion US$ (3000 billion
INR) (1 US$ is taken as 68.17 INR as on 27th
May 2018) annually or 3% of the GDP and
this figure is almost three times higher
than the official estimate offered by the
government. Bhalla in his article mentioned
that the food security bill will increase
costs of foodgrain subsidy by 336%. If the
cost of the food security is 3% of the GDP,
then a serious debate about affordability is
necessary. Bhalla begins with assuming that
subsidy provided in a year is 100. According
to the NSS report, 45% of the population
was accessing the PDS in 2011-12. The bill
says that it will cover a total of 67%. In this
condition the subsidy will be [(100*67)/45]
around 150 approximately, showing a 50%
increase almost. Later he points out that,
on the basis of NSS 2011-12 the average
consumption of foodgrain from PDS was 2.1
kg per person per month but the bill says that
it will provide 5.0 kg per person per month.
The allocation of foodgrain has increased in
the bill by more than 50%. In such condition
the subsidy will be [(150*5)/2.1] around 357
approximately. While analysing the subsidy
price per kg of foodgrains he says that that
subsidy will increase from Rs 13.5 per kg
to Rs 16.5 per kg with market price staying
constant at Rs 19. Under this situation the
subsidy will be [(357*16.5)/13.5] around
436 approximately. In 2011-12 total food
subsidy was 10.56 billion US$ (720 billion
INR) so after the implementation of NFSA
the subsidy will be (720*4.36) around 46.04
billion US$ (3139 billion INR) or 3% of the
GDP. Kotwal et al (2013) severely criticised
the implementation cost of NFSA by
Bhalla. Bhalla for his cost estimation took
2.1 kg per person per month as an average
consumption through PDS which shows
the consumption of entire population of
the nation. But under NFSA it is mentioned
that 67% of the total population will be
RECENT TRENDS IN THE DEBATE ...
covered. Under this condition it becomes
evident that only 45% of the population was
getting 2.1 kg grains per person per month
this shows that each person was getting
4.67 kg per person per month (2.1/0.45). So
if the beneficiaries were getting 4.67 kg per
person per month during 2011-12 then in
such condition subsidy will be [(150*5)/4.67]
around 160 approximately and calculating
the subsidy price per kg of foodgrains with
market price constant at INR 19 the subsidy
will be [(160*16.5)/13.5] around 195. Even
195 is too an overestimated figure because
Bhalla might have got confused between
per capita NSS consumption figure with
that what Central government supplied to
the State governments. In 2011-12 the PDS
off-take was 51.3 million for 45% population
which stands around 1.21 billion in such
condition the per capita supply of grains by
the government will stand out at 7.9 kg per
month. Thus, the subsidy will be (150*5)/7.9
around 94.93 and adding subsidy price per kg
of foodgrains at constant price of INR 19, the
subsidy will come [(94.93*16.5)/13.5] around
116. Thus, the total cost of implementation
of the bill will be (720*1.16) around 12.46
billion US$ (850 billion INR) approximately
which will stand around 1% of GDP. Sinha
(2013) in her article criticising the estimate
by Bhalla said that it is erroneous to assume
present level of leakages as assumed by NSS
will remain same in future. In the opinion
of Bhalla, in order to provide 5 kg of grains
per head per month to the people the
government will have to allocate 8.3 kg of
grains per head per month meaning thereby
adding extra amount which go out through
leakage and the subsidy on this higher
amount of grain will be the government’s
real expenditure. Another dimension which
needs to be emphasised here is that, as
Bhalla in his process of cost estimation said
that the actual assigned quota of grains
is 5kg but due to leakage only 3 kg grain
reaches to the beneficiaries because 40%
leakage has been held constant by Bhalla for
estimating the cost. Thus, for assuring that
beneficiary should get full 5 kg of quota, in
the opinion of Bhalla, government should
release 8.3 kg of grains so that 40% (3.3 kg)
will be leaked in the process of distribution
and 5 kg will reach to the beneficiary.
This shows that, when government was
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Adnan Shakeel
112 SuStainability
GEOGRAPHY, ENVIRONMENT, SUSTAINABILITY
allocating 5 kg of grains per head per month
to the people the actual amount received
by the beneficiaries was only 3 kg meaning
thereby that 2 kg (40%) was lost in leakage.
To solve this problem, it was suggested that
government should allocate 8.3 kg grains
per head per month so that after a leakage
of 40% the beneficiary should get 5 kg of
grains meaning thereby now 3.3 kg is lost in
leakage. In the opinion of the author in this
process of solution there are more chances
of leakage because earlier on the basis of
40% leakage, only 2 kg grain was leaking (5
kg minus 3 kg) but now by providing 8.3 kg
of grains/head/month the government is
providing the leakers a chance of leaking 5.3
kg of grains (3 kg minus 8.3 kg). So inspite of
finding solution for leakage and corruption
the system is incorporating these social evils
as an integral part of NFSA and under such
condition the leakage will increase with
time and the amount reaching the poor will
remain the same leading to increasing cost
of implementation of the Act.
Taking the debate further, Mishra (2013)
in her article estimated the cost of
implementation of NFSA at 18.26 billion US$
(1245.02 billion INR) and estimated that the
annual cost of the NFSA will be anywhere
between 6.51 billion US$ (444.11 billion INR)
to 11.21 billion US$ (764.86 billion INR) in
2013-14 and the total cost of grandfathering
of existing beneficiaries would be around
3.0 billion US$ (204.74 billion INR). Moreover,
in her article she mentions that the BPL
population before the implementation of
NFSA were getting 7 kg of grains per head
but after the implementation of NFSA they
will get 5 kg of grains. Meaning thereby,
they will lose 2 kg of grains per head and
the BPL households which were early
getting 35 kg per household will not get
the same quota. This shows that the existing
APL (above poverty line) beneficiaries who
move out of coverage would be worse off
and the BPL (below poverty line) individuals
whose entitlement is reduced by 2 kg
would also loose. Thus, to ensure that no
one should affected with respect to their
current assigned quota or what they are
currently getting an additional of 3.0 billion
US$ (204.74 billion INR) will be required
which Mishra has termed as the cost of
02 (12) 2018
grandfathering the existing beneficiaries.
But Sinha criticising the fact said, that while
calculation of extra grandfathering cost
Mishra does not taken into consideration
the fact that many states even now are
not providing 35 kg to BPL households.
Mishra further argues that 180 million APL
beneficiaries moving out of coverage needs
to be compensated by providing 3 kg of
grains per head. Criticising this issue, Sinha
said that firstly, it is not clearly mentioned
in the study that how Mishra has arrived at
these figures. Secondly; entitlement under
APL category are actually given only in few
states and the quantity provided also varies.
Moreover, principal advisor to the Supreme
Court commissioners on the right to food
Mr. Biraj Patnaik rubbishes the claim and said
that many economists in recent days have
cited exaggerated figures. In his opinion, the
implication on the food subsidy because of
PDS will not be more than 3.66 billion US$
(250 billion INR).
Now the matter of concern is that after
the implementation of NFSA what will
be the scenario related to food subsidies
provided in the Act. It might be argued
that the foodgrain subsidy incurred by the
Government of India for the PDS and other
welfare schemes has been increasing over
the years. Food subsidy bill represents the
basic direct cost incurred by the Central
Government on procurement, stocking
and supplying of various food based safety
nets such as PDS. During the last ten years,
food subsidy has more than quadrupled
from 3.38 billion US$ (230.71 billion INR)
in 2005-06 to 15.47 billion US$ (1055.09
billion INR) in 2015-16 at current prices.
As a percentage of agricultural GDP it has
increased from 4.5% to 13.2% during the
same period. Increasing economic costs of
handling foodgrains, record procurements
in recent years and widening differences
between the economic cost of foodgrains
and the central issue price have been the
major factors leading to the ballooning food
subsidy (Kumar 2017). The food subsidy
accounted for about a third of total subsidies
by the Government of India (which includes
fuel, fertilizers, education, etc.) in 2011-12
and is likely to increase to about 40% due
to the NFSA. In the absence of the NFSA
the foodgrains subsidy was expected to
grow by 28% during 2013-14 to 2014-15
reaching to 20.7 billion US$ and with the
advent of NFSA the amount will reach upto
24.3 billion US$ or about 1.2% of the GDP.
It has been predicted that the NFSA would
worsen the already compromised fiscal
situation of the country. The Government
of India fiscal deficit for 2013 was about
4.9% of GDP (approximately US$144 billion);
The International Monetary Fund predicts
India’s total fiscal deficit (inclusive of state
governments) to be 8.5% of GDP in 2014
(Varadharajan et al., 2014). As per the
budget put forwarded by Government of
India defines that food subsidy has rarely
surpassed 1.0% of the country’s GDP during
the last three decades with only year 201112 as an exception when the GDP slightly
jumped above 1%. If India has finally decided
to provide food security to all its citizens then
it has to make sufficient financial provisions
for food security programmes. Keeping in
mind the huge population base followed
by large proportion of malnourished and
undernourished, spending 1 or 2% of the
GDP is not a big amount to incur to end
hunger and food insecurity (Swaminathan
2013).
concerns related with integrated child
development Scheme (icdS)
It is well known fact that that Food Security
Bill was brought into existence by Congressled United Progressive Alliance (UPA) and
later it became an Act. During the time, the
matter was highly debated in the Parliament
by the Ministers of opposition BJP-led
National Democratic Alliance (NDA) for the
expansion of provisions, universalisation of
the scheme and increase in the quantum
of the entitlements. But after two years of
implementation of the NFSA the same party
i.e. NDA who was earlier debating about the
proper implementation, universalisation
and expansion of the Act is now throttling
the NFSA by making it bleed with thousands
cut both economically and socially. The
same ministers who were earlier talking
in favour of NFSA have not allowed even a
single dimension of NFSA unmolested and
unabated. The most serious blow came from
the NDA was when they started to cut down
RECENT TRENDS IN THE DEBATE ...
the budget to some of the key programmes
of the Act. The ICDS has a 50% cut and Mid
Day Meal Scheme’s budget was reduced
from 1.90 billion US$ (130 billion INR to
1.32 billion US$ (90 billion INR). Some of the
other welfare schemes which were directly
related to nutrition and food security of
the masses have faced similar and vicious
cutbacks (Patnaik 2016). The ICDS provides
‘take home ration’ (THR) to pregnant and
lactating women and infants under three
years of age and children between 3 years
to 6 years of age will get hot-cooked meals.
A total of 6.5 crore beneficiaries from among
which 4.6 crore are infants and 1.9 crore
are mother which are currently getting
benefit under the ICDS scheme. Coffey and
Hathi (2016) while analysing the situation
of pregnant and lactating women in India
said that the pregnant and lactating women
are extremely undernourished and poor
maternal nourishment is evidenced by a high
neonatal mortality rate, low pre-pregnancy
body mass, poor weight gain during
pregnancy and a high rate of anaemia. The
programmes prior to the implementation
of NFSA were not adequately addressing
the problem of poor maternal nutrition and
the situation even after the implementation
of NFSA is more or less the same because it
has been more than two years after the Act
was passed, and the government has made
no plans to implement it. A report by NITI
Aayog entitled ‘Reforming Take Home Ration’
under ICDS scheme prepared a proposal
to substitute THR with cash Transfer. It
is mentioned in the report that the THR
scheme is affected by leakages, poor quality
food supplements and vested interests. Cash
transfer will benefit the women in having
better food, more rest to pregnant women
and will improve birth weight among
Indian Children. At the same time the Union
Minister Maneka Gandhi said that instead of
providing food through anganwadis a much
better option would be providing ‘nutrient
packets’ (packets having dry mixture of
peanuts, millets and micro-nutrients which
can be consumed with milk, water and
juice) which can be easily delivered to the
children and mothers via Indian Postal
Service (Bhuyan 2017). However, food
experts opine that ready-to-use therapeutic
foods (nutrients packet) cannot always be
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Adnan Shakeel
114 SuStainability
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a substitute for hot cooked meals because
there is nothing better than a hot-cooked
fresh meal. The Director General of Indian
Council of Medical Research said that
therapeutic food/nutrients packets can be
used as an extra food for children suffering
from acute malnutrition but these nutrients
packets should not replace the normal diet.
(The Indian Express 2017). Substituting THR
with cash transfer is widely debated among
the scholars and the cash transfer proposal
faced severe criticism because according to
Nation Nutrition Monitoring Bureau (NNMB)
there is protein-calorie gap among children
and providing supplementary nutrition with
respect to THR is the best way out than cash
transfer because in cash transfer their are
chances that money may be spent in other
things. The most important concern related
to cash transfer is that it is not inflation
indexed meaning thereby that cash transfer
would fail to keep pace with the rising food
prices (Nair 2017). Moreover, the secretary
of the Women and Child Development
Ministry said that thought debate is going
on between THR and cash transfer but
before coming to a final decision a pilot
survey will be undertaken in some of the
selected districts in order to test the efficacy
of implementing the ICDS supplementary
nutrition component through cash transfer
(money will transferred in the Jan-Dhan
account of the mother).
underlying
accusations
corporation of india (Fci)
of
Food
It is a well known fact that the NFSA is largely
dependent on FCI for procurement, storage
and distribution of foodgrains to the people
of the nation. The reason behind procuring
foodgrains from the farmers is threefold.
Firstly, the FCI procure foodgrains from
the farmers to build an operational stock
for supply under TPDS and other welfare
schemes. Secondly, FCI procure foodgrains
and build buffer stocks to meet any kind of
emergency whether natural and manmade
and thirdly, open market purchase and sale
in order to stabilise the domestic prices and
provide food security requirements through
sale of subsidized grains. Government
estimated that 61.2 million tonnes of
foodgrains will be required annually after
02 (12) 2018
implementation of the NFSA from among
which 54.7 million tonnes of foodgrains
will be used to feed the TPDS scheme
and 6.5 million tonnes to meet the other
grain needs. This estimate was later revised
slightly upwards to 61.4 million tonnes after
the Census 2001 figures used for the earlier
calculations were replaced with Census
2011 figures (Saini and Gulati 2015). So if
FCI will procure foodgrains in such a huge
amount then it will lead to inflation because
the supply to the open market will decrease.
Another problem that comes out is that
of storage because the development in
the infrastructure of storage has not kept
pace with the increase in procurement
and this has widen the gap between the
storage capacity and actual foodgrains
procured from 6 million tonnes in 2008 to
33 million tonnes in 2012. The increased
level of procurement and distribution of the
foodgrains as a result of NFSA requires higher
storage and warehousing capacities. Though
an initiative has been taken by FCI to make
the storage capacity of 18.1 million tonnes
through private entrepreneurship guarantee
scheme out of which only 3.2 million tonnes
of capacity has been completed until
now (Jha and Tanksale 2015). For effective
implementation of NFSA (creation of new
storage capacity, maintaining, managing
and transportation of foodgrains), there is
an additional requirement of 22-32 million
tonnes of storage capacity with cost upto
83 billion INR. It will surely impose a huge
financial burden on the exchequer because
of rising costs of managing these foodgrain
stocks. Another problem which comes out is
of maintenance of the grain stock because if
the grains remained undistributed they will
rot due to inadequate storage facilities and
faulty storage techniques. Evidences shows
that, even after the implementation of NFSA
when the total food stock in FCI reached to
80 million tonnes against a buffer stock norm
of 31.9 million tonnes (Patel 2017), nearly 25
million tonnes of the grains were kept in open
storage and an estimated of about 21 million
tonnes of grains got damaged eaten by
rodents, pests and birds. It is believed that as
much as 194 thousand tonnes of foodgrains
worth crores of rupees kept in security were
wasted between 2005 and 2013 (The Hindu
2016). In addition to the operational stocks
above, the Central Government is required
to hold a stock of foodgrains at all the times
to ensure food security during periods when
production fall short of normal demand and
during the times when an increased grain
supply in the open market is needed to
stabilise prices (strategic stocks). At present
FCI maintains five million tonnes of grains (3
million tonnes of wheat and 2 million tonnes
of rice) as strategic stocks in its granaries.
Moreover, total economic cost and minimum
support price (MSP) of the foodgrains during
the past were on the rise but the central
issue price (the price at which the Central
government sell foodgrains to the state
governments) and the price charged to
the consumers at FPS (fair price shop) have
remained almost the same. During the last
decade the total economic cost of wheat
has been raised from 0.12 US$ (INR 8) per kg
to 0.24 US$ (INR 16.5) per kg but the central
issue price for the BPL beneficiaries remained
unchanged and kept at 0.06 US$ (INR 4.15)
per kg. Thus, as the gap between the central
issue price and the MSP will get widen (Jha
and Tanksale 2015) and the average sale
realization of FCI’s will be low as compared
to the cost incurred, making it economically
inefficient. Thus, the major financial
implication comes from the fact that NFSA
fixed the CIPs (central issue price) at INR 3/2/1
for three years since the commencement of
the ACT and will result into increase in the
subsidy burden on the government (Saini
and Gulati 2015). Going through all these
issues and challenges which FCI was facing,
the BJP led National Democratic Alliance
government set up a high level committee
(Shanta Kumar Committee) in 2014 August
in order to restructure, reorient and reform
the FCI. Committee recommended that
that the current PDS be replaced by cash
transfer allowing FCI and the States free
from procuring, storing and distributing the
grains and in due course of time FCI can be
completely dismantled and folded up. But
the situation of food and nutrition security
in India even after the implementation of
NFSA presents a picture so grim that it seems
unwise to dismantle the FCI all of a sudden. A
more sensible way would be to increase the
applicability and utility of the existing system
(Basu and Das 2015).
RECENT TRENDS IN THE DEBATE ...
Storage of Foodgrains
A high level committee set up by
Government of India to look into the matter
of restructuring FCI has suggested that the
number of beneficiaries covered under
NFSA should be reduced from 67% to 40%.
This is because Government on one hand is
increasing the MSP to support the farmers
and on the other hand it is lowering the issue
price for supporting the beneficiaries thus, it
has been recommended by the committee
that subsidy (in the form of low PDS price)
and MSP should be linked and linking will
support government in containing fiscal
deficit. Though government will get benefit
by interlinking PDS and MSP but the farmers
will be the larger sufferers because the
government will try to keep PDS price as
low as possible for the beneficiaries which
means that the increase in MSP would be
minimum too which will severely affect
the farmers (Sood 2012). The committee
has also recommended that instead of FCI,
let the private sector to procure and store
the foodgrains in those states which are
performing well in procurement because this
will save the MSP paid by the government to
the farmers and the amount of money saved
can be directly transferred into the account
of the farmers and the beneficiaries through
adopting cash transfer system (Rajalakshmi
2017). Another point is that the FCI’s per unit
storage cost is 30% higher, labour cost is
almost four times higher for rice and seven
times higher for wheat, interests payments
are four times higher for rice and two and a
half times for wheat due to longer storage
periods (Sinha et al. 2011). The committee
has suggested that if the Government
avoid the cost on procurement, storage and
distribution and adopt cash transfer method
then it can save an amount 4.84 billion US$
(330 billion INR) leading to the reduction
in the subsidy burden on the exchequer
(Jitendra 2015).
distribution of Foodgrains
More than 70% of the grains are procured
by the northern states and rest procured the
southern states. Northern zone accounts for
as high as 67% of the total storage capacity
followed by southern zone (14%), western
115 SuStainability
Adnan Shakeel
116 SuStainability
GEOGRAPHY, ENVIRONMENT, SUSTAINABILITY
zone (11%), eastern zone (7%) and northeastern zone (1%). While 64% storage space
is available in five States (Punjab, Haryana,
Uttar Pradesh, Chhattisgarh and Andhra
Pradesh) 13% is in two States (Rajasthan
and Maharashtra) and 23% is shared by 24
States and UTs (union territories). Moreover,
the most important challenge with respect
to distribution under NFSA is to check the
leakage and corruption and ensure rigorous
monitoring of foodgrains to the last mile
distribution point i.e. up to the fair price
shops (FPSs) from where the consumer
takes his assigned quota during its transport
from northern states to southern states.
This involved heavy transportation costs.
Moreover, it is mentioned in the NFSA that
the issue price will same for a period of three
years and after its implementation the issue
price will be revised in July 2016 to reduce
the burden on the exchequer. Increasing
the issue price will no doubt improve the
Centre’s finances by reducing the subsidy
component. However the increase in the
cost of foodgrains supplied may face political
pushback. The food subsidy bill under the
antyodaya anna yojana (AAY) scheme has
been climbing over the years and it rose to
1349.19 billion in 2015-16. This is largely due
to the widening gap between the economic
cost of foodgrains and the price at which it is
issued by the FCI. As far as the economic cost
is concerned, it was 0.45 (INR 30.9) per kg for
rice and 0.32 US$ (INR 22.0) for wheat during
2015-16 up by 5.0% and 7.3% respectively.
The MSP was too on the rise, for instance the
MSP for wheat increased by 5.2% for 201617 to 0.22 US$ (INR 15.25) per kg as against
0.22 US$ (INR14.7) per kg (up by 4.3%) for
rice. But, the issue price for the wheat and
rice for Antyodaya scheme, BPL and APL
card holders has not been revised by the
government since July 2002 leading to put
undue financial burden on the exchequer
(Muthukumar 2016).
addressing Food access through public
distribution System (tpdS)
In the contemporary times the core problem
related with India’s food insecurity is not
related with food availability or domestic
food production but it is related with
its distribution. On an average India is
02 (12) 2018
producing more than 250 million tonnes
of foodgrains annually and more than 60
million tonnes on an average has been
kept in stock all the time in the recent past
for emergencies and government procure
enough food grains from the farmers in order
to distribute it among the needy. But TPDS
is unable to achieve the objective which it
was meant for. The NFSA is also challenged
as far as the TPDS is concerned because the
identification of eligible household is left
to the discretion of the State Government.
In the absence of the eligibility criteria for
the selection of the beneficiaries, no one
is really entitled to anything as a matter
of right this defeat the purpose of an Act
(Dreze 2013). Moreover, the very basic
debate that exists is between ‘targeted’ and
‘universal’ distribution system. Few believe
that targeting is unfair because it divides the
population into permanent social division of
APL and BPL and it is true that the crux of
NFSA is not to create class conflict. Targeting
is also and divisive and it prevent the
emergence of a cohesive public demand for
a functional PDS and a vocal demand is very
important for the success of the PDS (Dreze
2016). The crux of PDS whether targeted or
universal is to provide food and nutritional
security to the masses and this aim is not
likely to come cheap. Many scholars have
estimated the cost of NFSA will be more
than one lakh crore rupees but a nation
where close to 40% of children are stunted
and 20% wasted, with an overwhelming
79% of children aged between 3 months
and 3 years being anaemic, any strong step
to cope up with mass undernourishment
is bound to be expensive and to pay such
a price to protect everyone from hunger
and food insecurity is not much. Therefore,
scenario after the implementation of NFSA
on the basis of Economic Survey Report
2014-15, out of 55.44 billion US$ (3780 billion
INR) which accounts for 4.2% of the GDP was
spent on key subsidies during the financial
year March 2015. Out of this amount, 18.04
billion US$ (1230 billion INR) which accounts
for 1.14% of the GDP was spent on food
subsidy which increased to 18.18 billion US$
(1240 billion INR) during 2015-16. According
to FAO the percentage of undernourished
population in India during 2010-12 and
2014-16 was 15.6% and 15.2%. Thus if we
compare the amount of money spent of
food subsidy and decline in the percentage
of undernourished then there is no doubt in
saying that India’s welfare system is suffering
with leakages. Policy makers and researchers
are of the opinion that in a situation when
food subsidy is on the rise and the benefits
of distribution is on the fall then amendment
must be done in order to make an efficient
use of public resources. Widespread
corruption has diverted the benefits of the
poor to the pockets of the intermediaries
and officials. Neither the system covers the
genuine beneficiaries, nor does it support
the recipients with total of benefits (Lenka
2017). Thus, it becomes necessary to
analyse whether Government should focus
in improving the current PDS by reducing
cost, plugging leakages and bringing
effectiveness or replacing the PDS with
food stamps and cash transfer. Moreover,
as mentioned in the NFSA that Central
government will take the responsibility of
procuring, storing and delivering foodgrains
at the doorstep of the State Warehouses thus,
it is the responsibility of State Government
to identify the beneficiaries and certify that
the entitlements are enforced amongst
the beneficiaries. In case the State fails to
provide grains (legal entitlements) to the
beneficiaries then it is supposed to pay the
‘Food Security Allowance’ in cash form. This
lead to serious matter of debate and some
of the scholars opined that if we provide
cash to the people directly then FCI could
make itself free from the operations like
procurement, storage and distribution of
grains because after getting cash people
can buy the grains directly from the market.
cash or in-Kind transfer
Some of the scholars support the idea of
cash transfer rather than the in-kind transfer
(food transfer). In a study it was found that
when the poor were provided with food
transfer they consumed more food than in
cash-transfer (Gentilini 2007). Fraker (1990)
analysed that the consumption of food in
food-transfer increased from 17.0 to 47.0%
when a dollar of food stamp was increased
but in case of cash transfer the increase
experienced was nominal from 5 to 13% at
the same amount. Similarly, Barret in 2002
RECENT TRENDS IN THE DEBATE ...
in his study found that the household’s
nutrient availability increases by 2-10 times
in food transfer than similar value of cash in
cash transfer. But in the opinion of Sharma
(2006) cash-transfer is much better than that
of in-kind transfer because in cash transfer
the beneficiary is free to use the money
other than the purchase of foodgrains. It
might be possible that he/she may improve
the quantity, quality and diversify their
consumption basket. Moreover they can also
use the money in health and education. In
Uruguay, while providing unrestricted cash
assistance to pregnant women resulted into
decline in the frequency of low birth weight
followed enhanced maternal nutrition and
weight gain during pregnancy (Amarante et
al. 2011). It is believed that crediting subsidies
into bank accounts will reduce leakages,
delay etc. During 2017-18 the Centre’s food
subsidy bill is expected to go down by
3.66 billion US$ (250 billion INR) due to the
direct benefit transfer arrangement. Baye
et al. (2014) gives a mixed opinion, in their
study they though came at conclusion that
the households receiving cash had better
dietary diversity but these households
preferred to receive a mixed of food and
cash rather than cash alone. Because the
cash may be spent on non-staples food such
as fruits, vegetables etc. Relying on the cash
transfer alone means that the beneficiary’s
household will have to depend on the free
market to meet all their food needs. The
stabilising effect from inflation which is the
main function of PDS would come to an
end. But cash transfer is also not an easy task
because for providing money at household
level the financial infrastructure should be
very high for installing banks, automated
teller machines (ATMS) and post offices at
village level which is a very tough task. Cash
transfers thus are only a partial substitute to
the PDS.
As debated whether cash transfer is more
beneficial and productive or the food
transfer but one cannot deny the fact
that PDS in India contributed positively
and beyond expectations in the State like
Chhattisgarh, Tamil Nadu, Punjab and Kerala.
The state of Chhattisgarh has experienced
a transmogrified change in its PDS system
because it used to have a very inefficient
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Adnan Shakeel
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GEOGRAPHY, ENVIRONMENT, SUSTAINABILITY
and corrupt system (Vydhianathan and
Radhakrishnan 2010). Using information and
communication technology the State has
brought all the PDS related operations on the
web and one can easily check the mobility
and the location of foodgrains within the
chain. The fair price shops (FPSs) was ‘deprivatised’, earlier the FPSs was owned by a
private owner but now the FPS are run by
community based organizations such as
gram Panchayat, self help groups (SHGs), Van
Suraksha Samitis (Forest Cooperatives) and
other cooperative societies (Dreze and Khera
2010; Bathlaet al. 2015). The motto behind
this was when the people will be run their
own ration shop the chance to cheat will be
minimised to least and if cheating still prevails
this means that they are cheating themselves.
The government has computerised the full
chain from the procurement of grains from
the farmers to the distribution to target
consumers. Chhattisgarh now cover more
than 80% of the rural population under PDS
and has it from ‘targeted’ to ‘quasi-universal’
PDS (Puri 2012; Dreze 2016). So at the time
when many experts were of the opinion that
PDS should be replaced with food coupons
and cash transfer the Chhattisgarh model
provided some key lessons on making this
system work. Similarly, Tamil Nadu instead
of following a targeted approach follows a
universal approach and more than 93% of
the FPSs are under the hands of cooperative
societies. Involvement of women-self help
groups and others of the same village has
checked corruption and leakage and has
ensured safety, transparency and accessibility
in the system (Paolo and Vandewaalle 2011).
The state of Punjab too has renovated the PDS.
Under the new system the farmers sell their
produce to the ‘artiyas’ (foodgrain traders)
who then sale the grains to market and from
here the grains are packed in bags weighing
30 kg and transferred to the civil supplies
inspector who distributes these grains to
the beneficiaries. In the old PDS system the
grains were procured from the farmers then
transferred to the FCI’s warehouses and then
from here to the state warehouses and then
to FPSs. This new system saved almost 190 per
quintal of wheat distributed and it includes
the savings on transportation, administrative
costs and maintenance and custody charges.
State of Punjab on an average distributes
02 (12) 2018
8700 thousand tonnes annually and this
new system of distribution leads to a saving
of roughly 1.65 billion annually (Puri 2014).
Thus instead of bringing cash transfer
scheme in full fledge it is better to improve
the existing PDS because one cannot ignore
the above success stories and these already
set examples and achievement can be
extend across the country. Undoubtedly,
there are benefits of cash transfer but the
infrastructure required for mass transfer in
cash would take a long time to build but PDS
is already in the place so why not make use
of a system already in place without delay.
The main concern currently should not be on
‘cash versus food’ but to provide people with
income support and social security as soon as
possible (Dreze 2013). Through implementing
the right administrative and process reform,
the corruption, leakage, mismanagement
wastage and inefficiencies can be checked.
concerns with checking the corruption
It is mentioned in the NFSA that for checking
the corruption and black marketing
application of information and technology
tools will be taken in order to prevent
diversion. Aadhar Card (Unique Identification
Card) will be used as unique identification
and the entitled beneficiaries will be linked
with biometric information for proper
targeting and distribution of foodgrains. But
the problem of linking entitlements with
Aadhar card is that the entitled women or
the person may be unable to go to a shop
due to sickness or some emergency then
they will be devoid-off the benefits. Keeping
this point under consideration some of the
scholars are of the opinion that instead of
using Aadhar Card the government should
provide food coupons to the beneficiaries.
Producing these food coupons to any shop
they could get the food and later the keeper
of the shop after submitting the coupon to
the respected government offices could get
the money back.
challenges related to nutrition Security
As mentioned in the NFSA that it will provide
5 kg of foodgrains per person but the Indian
Council of Medical Research recommends
that an adult needs a minimum of 14 kg of
RECENT TRENDS IN THE DEBATE ...
grains per month. Moreover, the Act seems
to be giving priority to fine cereals (wheat
and rice) and neglecting pulses, coarse
cereals and oilseeds. Though the Act may
prove good to provide food security but
as far as the question of nutrition security
is concerned the Act is unanswerable and
fully ignores the nutritional security of the
population. Pulses are given less emphasis
under NFSA is because the production is
low and demand is high and sometime for
fulfilling the local demand need arise to
import pulses. The reason is low MSP for
the pulses but Shanta Kumar Committee
has recommended that the MSP should
be revised and the focus should be given
on pulses and oilseeds. Moreover, Famous
economist Jean Dreze said that the
fundamental problem related to food in
Indian context is of undernutrition and this
act though protect everyone from hunger
and can make a significant contribution
to the elimination of undernutrition. But
ending undernutrition apart from cereal
availability also requires health care, safe
water and sanitation. UNICEF too is of the
opinion that the fundamental problem
which India is currently facing is of
malnutrition because there are 61 million
children chronically undernourished and 8
million children suffering from severe acute
malnutrition. Therefore, the focus of the
planners and policy makers should be on
right to adequate nutritional security rather
than simply on food security (Jha 2013).
impeachment Regarding
marginal (S&m) Farmers
Small
and
Agricultural Census of India 2010-11 reveals
that S&M farmers (less than 2 hectares of land)
account for 85% of the total 138.35 million
operational holdings and 44.46% of the total
cultivated area. Considering average five
members in a family of small and marginal
farmer 75% of the small and marginal
families will qualify as beneficiaries under
NFSA. According to the Working Group on
Agricultural Marketing Infrastructure and
Policy Required for Internal and External
trade (Eleventh Plan), S&M farmers consume
nearly 60% of their production and keeping
40% for market. Apart from one/third
family consumptionthey too have to pay
for permanent and temporary farm labour,
also for feeding farm animals, for payment
in kind of farm equipment, customary dues,
repayment of loans and irrigation charges
etc from the same 60% which they have
kept for the family consumption. Since
most of S&M farmers are qualifying for NFSA
beneficiary and will receive subsidised grains
thus they will switch to crop cultivation
other than foodgrain which will affect the
40% of foodgrain production which they
are producing through using 44.46% of
cultivated area. Thus, S&M farmers if covered
under NFSA will shift their agriculture to
commercial crops and horticulture affecting
the foodgrain basket of India and the NFSA
too (Kalkoti 2017). Farmer’s organization
too speaking against the bill said that
since the larger share of their agricultural
produce is purchased, stored and sold by
the government leads to nationalisation of
agriculture. This will also disturb the market
mechanism and lessen the bargaining
power of the farmers. Further present bill
too do not have any provision for small and
marginal farmers.
The NFSA is an act of providing food aid to the
people which in context of India though has
kept people alive but it has little to address
the underlying causes of food insecurity
and the associated loss of productivity,
cognition and good health. It is a matter of
great concerns that providing food as an aid
to the masses is the final solution to food
insecurity. Is it not so that when people will
receive food as an aid it will hamper their
efficiency of doing work and contribute to
the nation and economic development. On
the one hand it is mentioned in NFSA, that
an Antyodaya household (poorest of the
poor) is eligible for 35 kg of foodgrain per
household per month at a rate of Rs 3 per kg
of rice and Rs 2 per kg of wheat. This means
for purchasing 35 kg of grains a person
requires a maximum of 105 Rs only. On the
other hand MNREGA which was launched
to guarantee at least 100 days of work a
year for every household has improved the
purchasing power of the rural household.
Under MNREGA, the revised wages shows
that the average wage is about 2.93 US$
(200 INR) per day (The Indian Express, 2016).
Thus, if a person is getting 2.93 US$ (200
119 SuStainability
Adnan Shakeel
120 SuStainability
GEOGRAPHY, ENVIRONMENT, SUSTAINABILITY
02 (12) 2018
INR) per day and he spends only 1.54 US$
(105 INR) then he could easily purchase the
ration for full month. So if a person is getting
full month quota of grain only by working
one day will he be going on to the field
for rest of the six days a week is a matter of
concern. This condition only prevails when
the implementation of MNREGA is upto
the mark. But there are studies which show
that the number of jobs under MNREGA is
less and the money which they get after the
work is also below the fixed amount which
is not sufficient for running their livelihood.
Thus providing food as an aid is not the final
solution because food aid will make people
sick and lethargic and it will curtail their
ability to do work. People getting food as
an aid permanently or for a longer period of
time makes them slaves of the system and
even if they are getting employment for a
shorter duration of time there is somewhere
hidden in their mind that if the condition of
food insecurity will prevail the governments,
the authorities and organisations will look
after them providing them food. Aid makes
people deprive of taking initiative towards
betterment, it undoes the teaching of self
help and makes population spoon fed.
government is still moving ahead with an
aim to eradicate hunger and food insecurity
through updating the existing programmes
like TPDA, ICDS and MDM which has earlier
characterised by widespread corruption and
improper implementation. Going through
the weaknesses and virtue described above,
the NFSA does not pledge to enhance the
food and nutrition security of the country
by decreasing the proportion of population
suffering from hunger and food insecurity.
However, NFSA tries to expand the existing
programmes to cover more and more
population under the umbrella of TPDS.
The most important thing one should
keep in mind that India is the second
most populated country in the world after
China thus a programme like NFSA cannot
eliminate hunger and food insecurity in just
one attempt. No programme in any field of
development is free from challenges and
it is clear that NFSA is also surrounded by
challenges thus, as the new challenges are
coming out a systematic reform is required
for the better implementation and better
outcome.
concluSion
The author is highly thankful to Indian
Council of Social Science Research (ICSSR),
New Delhi for providing financial assistance
under post doctoral programme. The
Maulana Azad Library, Aligarh Muslim
University is also greatly acknowledged for
providing other necessary facilities.
National Food Security Bill with the passage
of time has now become an Act but the
debate on its suitability and sustainability
is open. The article concludes that there
is wide range of variability regarding the
cost of its implementation. However, the
acKnowledgementS
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Received on april 6th, 2018
accepted on may 10th, 2018
123 SuStainability
Adnan Shakeel
GEOGRAPHY, ENVIRONMENT, SUSTAINABILITY
02 (12) 2018
124 SuStainability
authoRS
Adnan Shakeel has completed his doctoral programme in
Geography form Aligarh Muslim University, Aligarh in 2013 and
his thrust area was food security. During the tenure of his Ph.D
he was awarded with junior and senior research fellowships
from University Grants Commission, New Delhi, India. He was
also awarded with Post Doctoral Fellowship from Indian Council
of Social Science Research, New Delhi in 2014. He is currently
working on food insecurity in Bundelkhand Region of India
which is the most drought prone area of the country and is
facing drought since last one and a half decade. The scope of his
research interest includes agriculture, food security, sustainable
development and population dynamics. He has published many
article and research papers in referred international and national
journals.