National Food Security Act, 2013

National Food Security Act, 2013

Food security and insecurity in India
Date signed 12 September 2013
Status: In force

The National Food Security Act, 2013 (also Right to Food Act) is an Act of the Parliament of India which aims to provide subsidized food grains to approximately two thirds of India's 1.2 billion people.[1] It was signed into law on 12 September 2013, retroactive to 5 July 2013.[2][3]

The National Food Security Act, 2013 (NFSA 2013) converts into legal entitlements for existing food security programmes of the Government of India. It includes the Midday Meal Scheme, Integrated Child Development Services scheme and the Public Distribution System. Further, the NFSA 2013 recognizes maternity entitlements. The Midday Meal Scheme and the Integrated Child Development Services Scheme are universal in nature whereas the PDS will reach about two-thirds of the population (75% in rural areas and 50% in urban areas).

Under the provisions of the bill, beneficiaries of the Public Distribution System (or, PDS) are entitled to 5 kilograms (11 lb) per person per month of cereals at the following prices:

Pregnant women, lactating mothers, and certain categories of children are eligible for daily free meals.

The bill has been highly controversial. It was introduced into India's parliament on 22 December 2011, promulgated as a presidential ordinance on 5 July 2013, and enacted into law on 12 September 2013.[4][5]

odisha government implemented food security bill in 14 district from 17 November 2015

Assam government implemented Act on 24 December 2015.

Salient features

75% of rural population and 50% of the urban population are entitled for three years from enactment to 5 kilograms (11 lb) food grains per month at ₹3 (4.4¢ US), ₹2 (2.9¢ US), ₹1 (1.5¢ US) per kg for rice, wheat and coarse grains (millet), respectively;[lower-alpha 1]

The states are responsible for determining eligibility criteria;

Pregnant women and lactating mothers are entitled to a nutritious "take home ration" of 600 Calories and a maternity benefit of at least Rs 6,000 for six months;

Children 6 months to 14 years of age are to receive free hot meals or "take home rations";

The central government will provide funds to states in case of short supplies of food grains;

The current food grain allocation of the states will be protected by the central government for at least six months;

The state government will provide a food security allowance to the beneficiaries in case of non-supply of food grains; The Public Distribution System is to be reformed;

The eldest woman in the household, 18 years or above,[6] is the head of the household for the issuance of the ration card;

There will be state- and district-level redress mechanisms; and

State Food Commissions will be formed for implementation and monitoring of the provisions of the Act.# The cost of the implementation is estimated to be $22 billion(1.25 lac crore), approximately 1.5% of GDP.

The poorest who are covered under the Antodaya yojna will remain entitled to the 35 kilograms (77 lb) of grains allotted to them under the mentioned scheme.

Intent

The intent of the National Food Security Bill is spelled out in the Lok Sabha committee report, The National Food Security Bill, 2011, Twenty Seventh Report, which states, "Food security means availability of sufficient foodgrains to meet the domestic demand as well as access, at the individual level, to adequate quantities of food at affordable prices." The report adds, "The proposed legislation marks a paradigm shift in addressing the problem of food security – from the current welfare approach to a right based approach. About two thirds(approx 67%) of the population will be entitled to receive subsidized foodgrains under Targeted Public Distribution System. In a country where almost 40% of children are undernourished the importance of the scheme increases significantly."

Scope

The Indian Ministry of Agriculture's Commission on Agricultural Costs and Prices (CACP) has referred to the Bill as the "biggest ever experiment in the world for distributing highly subsidized food by any government through a ‘rights based’ approach."[7] The Bill extends coverage of the Targeted Public Distribution System, India's principal domestic food aid program, to two thirds of the population, or approximately 820 million people. Initially, the Lok Sabha Standing Committee on Food, Consumer Affairs and Public Distribution estimated a "total requirement of foodgrains, as per the Bill would be 61.55 million [metric] tons in 2012-13."[8] The CACP calculated in May 2013, "...the requirement for average monthly PDS offtake is calculated as 2.3 mt for wheat (27.6 mt annually) and 2.8 mt for rice (33.6 mt annually)..." When volumes needed for the Public Distribution System and "Other Welfare Schemes" were aggregated, the CACP estimated rice and wheat requirements to total an "annual requirement of 61.2" million metric tons.[7] However, the final version of the Bill signed into law includes on page 18 an annex, "Schedule IV", which estimates the total food grain allocation as 54.926 million metric tons.[9]

The Standing Committee estimated that the value of additional food subsidies (i.e., on top of the existing Public Distribution System) "during 2012-13 works out to be...Rs.2409 crores," that is, 24.09 billion rupees, or about $446 million at the then-current exchange rate, for a total expenditure of 1.122 trillion rupees (or between $20 and $21 billion).[8] However, the Commission on Agricultural Costs and Prices (CACP) calculated, "Currently, the economic cost of FCI for acquiring, storing and distributing foodgrains is about 40 percent more than the procurement price."[10] The Commission added,

The stated expenditure of Rs 1,20,000 crore annually in NFSB is merely the tip of the iceberg. To support the system and the welfare schemes, additional expenditure is needed for the envisaged administrative set up, scaling up of operations, enhancement of production, investments for storage, movement, processing and market infrastructure etc. The existing Food Security Complex of Procurement, Stocking and Distribution- which NFSB perpetuates- would increase the operational expenditure of the Scheme given its creaking infrastructure, leakages & inefficient governance.[10]

The Commission concluded that the total bill for implementation of the Bill "....may touch an expenditure of anywhere between Rs 125,000 to 150,000 crores," i.e., 1.25 to 1.5 trillion rupees.[10] As of the implementation deadline of 4 October 2014, only 11 states had either implemented the Act or declared readiness to do so.[11] On 28 November 2014, the Indian government announced, "Allocation of foodgrains to 11 States/Union Territories (UTs) namely, Bihar, Chandigarh, Chhattisgarh, Delhi, Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Punjab and Rajasthan has started under the Act..." and that the "remaining 25 States/UTs have not completed the preparatory measures required for implementation of the Act." The Indian government extended the deadline for implementation of the Act "by another six months, i.e. till 04.04.2015."[12]

Commentary

Critics

Criticism of the National Food Security Bill includes accusations of both political motivation and fiscal irresponsibility.[13][14][15][16] One senior opposition politician, Murli Manohar Joshi, went so far as to describe the bill as a measure for "vote security" (for the ruling government coalition) rather than food security.[13] Another political figure, Mulayam Singh Yadav, declared, "It is clearly being brought for elections...Why didn’t you bring this bill earlier when poor people were dying because of hunger?...Every election, you bring up a measure. There is nothing for the poor."[17]

The report of the 33rd meeting of the Technical Advisory Committee on Monetary Policy stated, "...Food prices are still elevated and the food security bill will aggravate food price inflation as it will tilt supply towards cereals and away from other farm produce (proteins), which will raise food prices further...Members desired that the Reserve Bank impress on the government the need to address supply side constraints which are causing inflationary pressure, especially on the food front."[18][19] Dr. Surjit S. Bhalla warned, "The food security bill...if implemented honestly, will cost 3 per cent of the GDP in its very first year."[20] The writer Vivek Kaul noted,

The government’s estimated cost of food security comes at 11.10%...of the total receipts. The CACP’s estimated cost of food security comes at 21.5%...of the total receipts. Bhalla’s cost of food security comes at around 28% of the total receipts...Once we express the cost of food security as a percentage of the total estimated receipts of the government, during the current financial year, we see how huge the cost of food security really is.[21]

The Indian Ministry of Agriculture's Commission on Agricultural Costs and Prices warned that enactment of the Bill could be expected to "induce severe imbalance in the production of oilseeds and pulses," and "...will create demand pressures, which will inevitably spillover to market prices of food grains. Furthermore, the higher food subsidy burden on the budget will raise the fiscal deficit, exacerbating macro level inflationary pressures."[10] The Commission argued further that the Bill would restrict private initiative in agriculture, reduce competition in the marketplace due to government domination of the grain market, shift money from investments in agriculture to subsidies, and continue focus on cereals production when shifts in consumer demand patterns indicate a need to focus more on protein, fruits and vegetables.[10]

Advocates

The bill was very widely viewed as a "pet project" of Indian National Congress(INC) President, Sonia Gandhi.[22][23] Gandhi addressed Parliament the night of the August 2013 Lok Sabha vote on the bill, saying its passage would be a "chance to make history".[24]

Former National Advisory Council member and development economist Professor Jean Drèze, reputedly one of the architects of the original, 2011 version of the bill, wrote, "...the Bill is a form of investment in human capital. It will bring some security in people’s lives and make it easier for them to meet their basic needs, protect their health, educate their children, and take risks."[25] Professor Drèze dismissed opposition from business interests, saying, "Corporate hostility does not tell us anything except that the Food Bill does not serve corporate interests. Nobody is claiming that it does, nor is that the purpose of the Bill."[26]

Minister of Consumer Affairs, Food, and Public Distribution K.V. Thomas stated in an interview,

This is no mean task, a task being accomplished in the second most populated country in the world. All the while, it has been a satisfying journey. The responsibility is not just of the Central Government but equally of the States/[Union Territories]. I am sure together we can fulfill this dream. The day is not far off, when India will be known the world over for this important step towards eradication of hunger, malnutrition and resultant poverty...By providing food security to 75 percent of the rural and 50 percent of the urban population with focus on nutritional needs of children, pregnant and lactating women, the National Food Security Bill will revolutionize food distribution system.[4]

In a rebuttal to Dr. Surjit S. Bhalla, three economists responded, "...the food subsidy bill should roughly double and come to around 1.35% of GDP, which is still way less than the numbers he put out."[27]

See also

Notes

  1. ↑ Schedule I, "Subsidised prices under Targeted Public Distribution System," stipulates these prices will be effective "...for a period of three years from the date of Commencement of this Act; and thereafter, at such price, as may be fixed by the Central Government, from time to time, not exceeding, - (i) the minimum support price for wheat and coarse grains; and (ii) the derived minimum support price for rice; as the case may be

References

  1. ↑ "Govt defers promulgation of ordinance on Food Security Bill". Times of India. 13 June 2013.
  2. ↑ "The National Food Security Bill, 2013 Receives the Assent of the President, Published in the Gazette of India as Act No. 20 of 2013" (Press release). Press Information Bureau.
  3. ↑ "Food Security Act To Be Implemented From July 5". Bloomberg TV India.
  4. 1 2 U.S. Department of Agriculture, New Delhi, India, Indian Cabinet Approves National Food Security Bill 2013, GAIN Report IN3037, 11 April 2013
  5. ↑ National Food Security Ordinance, No. 7 of 2013, 5 July 2013
  6. ↑ "The National Food Security Act, 2013" (PDF). The Gazette of India. New Delhi: Ministry of Law and Justice. 10 September 2013. Retrieved 1 January 2016.
  7. 1 2 Ashok Gulati and Surbhi Jain (May 2013). "Buffer Stocking Policy in the wake of NFSB: Concepts, Empirics, and Policy Implications" (PDF). Commission on Agricultural Costs and Prices, Ministry of Agriculture, Government of India.
  8. 1 2 Standing Committee on Food, Consumer Affairs and Public Distribution (2012-13), Fifteenth Lok Sabha, Ministry of Consumer Affairs, Food and Public Distribution (Department Of Food and Public Distribution) (January 2013). "The National Food Security Bill, 2011, Twenty Seventh Report" (PDF).
  9. ↑ "National Food Security Bill, Registered No. DL-(N)04/0007/2003-13, as published by the Ministry of Law and Justice, September 10, 2013" (PDF).
  10. 1 2 3 4 5 Ashok Gulati; et al. (December 2012). "National Food Security Bill, Challenges and Options, Discussion Paper No. 2" (PDF). Commission on Agricultural Costs and Prices, Ministry of Agriculture, Government of India.
  11. ↑ Dipak K Dash (8 Oct 2014). "Food security deadline for states expires without extension". Times of India. The eleven states as of 4 October 2014, were reportedly Assam, Uttarakhand, Chhattisgarh, Haryana, Maharashtra, Rajasthan, Punjab, Bihar, Delhi, Himachal Pradesh and Karnataka.
  12. ↑ "States gets another six months for implementation of national food security act". Press Information Bureau, Government of India. 28 November 2014.
  13. 1 2 Shekhar Iyer (26 August 2013). "This isn't food security, it's vote security, says BJP". Hindustan Times.
  14. ↑ Shweta Punj (29 September 2013). "Digestion pangs". Business Today.
  15. ↑ "Food bill: Experts seek proper selection, revamped PDS". Times of India, 8 September 2013.
  16. ↑ Praful Bidwai (9 September 2013). "Food Bill is a first step". The Daily Star.
  17. ↑ "Food Security Bill passed in Lok Sabha after nine-hour debate". FirstPost. 27 August 2013.
  18. ↑ RBI Committee meeting cautions the government against Food Security Bill
  19. ↑ RBI releases Minutes of the 24 July 2013 Meeting of the Technical Advisory Committee on Monetary Policy
  20. ↑ "Manmonia's FSB: 3% of GDP". Indian Express. 6 July 2013.
  21. ↑ Vivek Kaul (27 August 2013). "Food Bill is the biggest mistake India might have made till date". Firstpost.
  22. ↑ "Lok Sabha passes Sonia Gandhi's ambitious Food Bill". moneycontrol.com (CNBC). 27 August 2013.
  23. ↑ "Parliament clears Sonia's pet Food Security Bill, Cong eyes poll gain". CNN-IBN. 3 September 2013.
  24. ↑ Edited by Deepshikha Ghosh (27 August 2013). "Sonia Gandhi fine, 'relieved' that Food Bill was passed, Narendra Modi wishes her good health". NDTV.
  25. ↑ "Why The Food Bill Is Sound Economics". Tehelka. 13 April 2013.
  26. ↑ Revati Laul (7 September 2013). "‘The Food Security Bill Can Help To Protect The People From Poverty And Insecurity’,". Tehelka.
  27. ↑ Milind Murugkar, Ashok Kotwal, Bharat Ramaswami (28 August 2013). "Correct costs of the Food Security Bill". Ideas for India.

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