Subsidized food grains are distributed to eligible families in New Delhi on Sept. 1, 2013
For decades, the Indian government has been distributing subsidized food to millions of poor. But last September, New Delhi went a significant step further: Parliament passed the National Food Security Act (NFSA), guaranteeing access to subsidized food to nearly 70% of the 1.2 billion population. In an unprecedented experiment, the central government is now legally bound to provide each of over 800 million people — just shy of the combined populations of the U.S. and the European Union — 5 kg of subsidized food grains every month. (The poorest receive more, and states also run their own food-subsidy programs.)
For these people, food is now a right, not a luxury, and it’s up to officials to make sure they get it. The program, if successful, could give a major boost to the ruling Congress Party ahead of national elections this spring. The problem, critics say, is that the landmark legislation relies on an unwieldy network of farmers, buyers, storage facilities and sellers to provide some 60 million tons of subsidized grains each year.
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In many ways, the system works: according to a recent study, in fiscal 2011–12, over 500 million Indians received 51.3 million tons of subsidized food, or more than 10 times the amount of direct food aid delivered by the World Food Programme in 2011. But in 2005 the government estimated that nearly 60% of its grain did not reach beneficiaries because of theft, corruption and difficulties identifying the needy. More recent studies show that has improved somewhat, but over 17% of Indians are still undernourished, according to the 2013 Global Hunger Index.
Few would argue against getting food to more Indians. But not all agree the NFSA is the way to do it. The law is expected to cost the government about $20 billion in fiscal 2013–14 as it rolls out across India. That’s a moderate increase over what the government has already been spending on food programs, and its supporters say it is nothing short of a moral obligation of the government to its citizens. “The question is not whether we can do it or not,” Sonia Gandhi, leader of India’s ruling Congress Party, said in a rare public speech to lawmakers before the bill’s passage. “We have to do it.”
But critics say that more spending on welfare programs — especially when that spending relies on a flawed system — is reckless in an economy burdened by a weakened currency and a large fiscal deficit. Says Ashok Gulati, chairman of India’s Commission for Agricultural Costs and Prices: “The economic inefficiencies and the losses incurred [in the system] will outweigh the welfare gains you are trying to achieve.”
Can India’s ambitious scheme work? Read the full story here, and read Michael Schuman’s viewpoint on the law here.
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