The Great Indian Story continues

Food security bill passed in the lower house. Not sure if I should put a sad face or should feel happy that the Indian poor is going to get the food at subsidized rate (Rs 2 per kg). It makes me wonder even the so called "Indian Poor" who is entitled to receive this subsidized grain is aware of such a fight going on in the country. Never the less, I am happy that at last some sensible person has spoken about the point that we discussed in my earlier post that the Indian statistics say that poverty in India is about 22% however the food security bill covers 67% of the population (does that mean that even after 66 years of Independence, India still has 67% of the population going hungry!!). 

There are three things that worry me - one that nobody is aware of the right cost of this massive project (ranges between $5bn to $22bn) and with fiscal deficit already at about 5%, I am not sure where this is going to take us and second that not a single political party (neither BJP, SP, JD) had guts to counter the bill although there were a few shouts made, and finally if the government is buying grains from the farmer at Rs 18 per kg (govt buys only about a third of the total production and the remaining is sold in the open market) and sells the same at Rs 2 per kg for 67% of the population, I am afraid it is going to give the so called farmer less incentive to sell the grain at Rs 18 or above in the open market for the black market for grains is highly likely to crop up thus making the farmer poorer!

Already the import duty on Gold is likely to encourage smuggling of this precious metal for the Indian population never shies away from Gold. Without deviating from the topic of food security, I just want to recall what a famous Indian economist once said - What India needs is not food supply but nutrition. He goes further to claim that the bottom 30% of the population lives with just 1/8th of the nutrition intake relative to the top 30% of the population. 

I am not sure if the country requires a food security bill (for one famous economist put it nicely that if you give something at subsidy, it makes the recipient lazy and disrespectful towards what he is getting) but i am sure it does not require one at this juncture when we are at a brink of breaking down and have no road to take!