Supreme Court Forces The Govt To Act,
To Stop Grains Being Wasted
By Devinder Sharma
03 September, 2010
Ground Reality
Amidst all the raging controversy and debates over wasted grains and hungry people, the Supreme Court has certainly created quite a flutter by asking the government to provide foodgrains free to the poor than to allow it to rot. This verdict, although not practically implementable, did show the urgency and in many ways reflected what an average citizen would say looking at the TV reports of rotting foodgrains in storage.
So much so that it sent a Group of Ministers (GoM) into a huddle to immediately spell out what they intend to do. Since the Supreme Court wanted a definite answer by Monday Sept 5, the GoM has come out with the promise of revamping the rotten Public Distribution System (PDS) and has also promised to make an additional allocation of 2.5 million tonnes of grains at below the poverty line price to States. This will be done in the next six months.
I only hope that the Supreme Court keeps up the pressure to force the government to act. It is criminal to let grains rot while millions go to bed hungry. This can happen only in a democracy.
The nation is still not sure as to what to do to ensure household food security. I find the Sonia Gandhi-led National Advisory Council (NAC) still grappling with a way out while the Ministry for Food and Agriculture insisting that providing a monthly ration of 35 kg to 37.2 per cent of the population computed to be below the poverty line is the answer. The issue has got so polarised that the NAC goes on harping on the need to ensure a universal right to food just because it has taken a position which suits its constituency.
The Supreme Court has questioned the justification of a universal PDS. I agree. There is no need for a universal PDS as it would provide a license for the grain traders to make a killing. The Supreme Court would do well to consider the more plausible approach by raising the upper limit of the beneficiaries in the sense that instead of 37.2 per cent, it needs to include 55 per cent of the population (which means following the UNDP estimate of poverty in India) as beneficiaries. This will automatically include all those cases which are on the border line. At the same time, it will also ensure that the National Food Security Act is not a half-hearted attempt.
However, providing 35 kg of grain to the BPL population is simply nothing more than food entitlement. When we use the term Food Security, as in the proposed National Food Security Act, we surely have to look beyond entitlements. And that is where the NAC fails, and so does the Ministry for Food and Agriculture.
Unfortunately, the proposed National Food Security Act is a stand alone programme. It fails to go beyond the quota of ration each family needs to receive. It fails to integrate agriculture with food security. Unless we make a sincere attempt to make a historical correction about our perception of food security in the long-term I fear sooner than later the Supreme Court may have to step in again.
Perhaps one way of looking at food security is to follow what Chhatisgarh has done in the past four years. It is running a right-to-food programme that has impacted the lives of everyone involved: labourer, small farmer, large farmer, middlemen, mandis and the government. Food Security is just the starting point, says a full page report in the Economic Times (Sept 2, 2010).
M Rajshekhar reports under the title New Food Rules: "The myriad ways in which such a welfare programme touches lives and other aspects of the economy have shaped -- and accelerated -- several ongoing trends. These might well be replicated, in varying degrees, as and when the Centre rolls out a national food security programme on similar lines."
The problem is that since Chhatisgarh is a State under the BJP rule, and the Centre is in the hands of UPA-II government, the political configuration is not allowing due recognition for what appears to be a more practical way to ensure food security. I would have been delighted if the UPA-II had invited Chhatisgarh Chief Minister Raman Singh to actually oversee the country's food security programme. I wonder when will democracy mature to a level when cutting across party lines we begin to respect merit and performance.
Chhatisgarh relies on what is called local production-local procurement-local distribution model. Chhatisgrah bypassed its mandis in paddy procurement, instead buying through cooperative societies and procurement centres at the village level. The mandis, though, are unaffected, as the societies have to pay a procurement tax, the revenues from which go to the mandis.
For four years now, Chhatisgarh has been giving 35 kg of grain -- comprising rice and wheat -- a month at heavily subsidised rates to 3.6 million of its 4.4 million households. The ultra-poor pay Re 1 per kg, while the poor pay Rs 2 per kg, against the market price of Rs 12-17 a kg. The ration card is the document that enables this subsidised transfer.
You can read the complete article:
New Food Rules
By M Rajshekhar
http://bit.ly/9BPa3e
Growth Fiction: India and China in race to fake GDP
Posted: 02 Sep 2010 12:55 AM PDT
Sometimes back, questions were raised over the credibility of China's GDP estimates. Not surprising, you will say. Even at that time I had said that it will be interesting to find out how authentic are India's GDP figures.
Well, I wasn't wrong.
The Economic Times (Sept 1, 2010) has pointed to certain discrepancies in the GDP data. Accordingly, the GDP data put out by the government have raised some serious credibility issues. Now, these are the gaps:
Divergence in Growth Numbers:
From the supply side, or as measured from output in agriculture industry and services, GDP grew at 8.8 per cent. But demand side growth, based on private and govt expenditure, investments and net exports, was 3.7 percent. The difference between the two is net direct taxes. Data suggests, taxes have fallen while subsidies have risen. This is at odds with improvement in govt finances.
Expenditure Numbers show a Dismal Picture
Private consumption growth has slumped to 0.3 per cent in Q1 from 2.6 per cent in Q4 of last fiscal. Growth in investments has plummeted to 3.7 per cent. Government consumption growth is negative. The data is at odds with strong anecdotal evidence of consumer demand. Car sales were up over 35 per cent in July.
I am sure there are a lot many people like me who cannot make a head and tail of what has been written above. Here is what Mridul Sagger, Chief Economist, Kotak Securities, has been quoted as saying: "This would erode the credibility of Indian statistical system, hitherto acknowledged as superior to that of China. GDP numbers for latter are always questioned, but that would pale in comparison to our Q1 numbers."
The Economic Times says: The robust 8.8 per cent growth figures was not corroborated by the 'demand side' of the equation based on transactions in the market place. The demand number -- calculated from private and government consumption, investment and net exports -- showed that the economy grew as low as 3.7 per cent during the first quarter of the current year. On an average, the divergence is well below 0.5 per cent though on a few occasions it has touched 2-3 per cent.
Within 32 hours, the government made some correction. It has brought down the GDP to 8.5 per cent. But I am still not sure whether even that figure is a correct estimate. Let me explain why.
1. Growth is manufacturing has slowed down. The share of fixed capital formation in the GDP has slipped below 30 per cent.
2. Exports have slowed down, grew by 13.2 per cent in July as compared to 30 per cent in June.
3. Industrial output growth in June has also moderated. Other signs of slowing growth are the low cargo handling at major ports, and low freight movement by railways.
If Industry, manufacturing, exports, and agriculture (the figures are mere variation, and not reflective of growth) are not looking up, I wonder how can we say that the economy grew by 8.5 per cent. It is simply a fictitious figure.
If growth has to be measured in terms of the number of cars sold or the number of mobile phones sold, I think the entire system of calculating GDP needs to be revamped. A better way to compute growth would be to know how many more people have got employment, and how many more hungry mouths have been fed.
Moreover, treating annual variation in farm output (I don't know how you can measure agriculture growth every quarter??) as growth is grossly misleading. If in 2008-09, for instance, the production is low because of drought/floods, and therefore even if India achieves its normal projections in foodgrain output in 2009-2010, it cannot be construed as growth. This is merely an annual variation in production figures.
Economist must measure agriculture growth looking at the performance in production spread over at least 5 years. Anything less than that is simply not correct.
