Ashok Gulati writes: If India has been so successful in reducing poverty and improving food availability, why does it have to give almost free food to more than 800 million people under the National Food security Act?
Written by Ashok Gulati
It is against these predicaments and pledges that we need to assess how far we have travelled. (C R Sasikumar)
In another two weeks, India will be celebrating its 75th Independence Day. Year-long celebrations are likely to follow. This is also an occasion to reflect on how India’s “tryst with destiny” has played out over these years. India started its journey as a newborn nation with deep wounds of Partition. Independent India’s population was roughly 340 million, with more than 70 per cent extremely poor, and only 12 per cent literate.
Winston Churchill had famously warned: “If Independence is granted to India, power will go to the hands of rascals, rogues, freebooters, all Indian leaders will be of low calibre and men of straw. They will have sweet tongues and silly hearts. They will fight amongst themselves for power and India will be lost in political squabbles. A day would come when even air and water would be taxed in India”.
Partition made things grim. But Jawaharlal Nehru said in the Constituent Assembly on August 14, 1947, “At the stroke of the midnight hour, when the world sleeps, India will awake to life and freedom. A moment comes, which comes but rarely in history, when we step out from the old to the new, when an age ends, and when the soul of a nation, long suppressed, finds utterance. It is fitting that at this solemn moment, we take the pledge of dedication to the service of India and her people and still to the larger cause of humanity.The service of India means, the service of the millions who suffer. It means the ending of poverty and ignorance and disease and inequality of opportunity”.
It is against these predicaments and pledges that we need to assess how far we have travelled. One can find both Churchill and Nehru to be right in varying degrees. But here let me focus on the basic necessities — poverty, illiteracy and food.
From more than 70 per cent poor in 1947, the head-count ratio (HCR) of poverty in India dropped to 21.9 per cent in 2011, as per the erstwhile Planning Commission’s estimates based on the Tendulkar poverty line. The drop in HCR during 2004-11 was almost three times faster than during 1993 to 2004, and much faster than during the socialist era of 1947-91. But many Leftists disputed the poverty line, and the government had to set up a committee under C Rangarajan, which estimated HCR poverty at 29.5 percent in 2011. It is ironic that after 2011, we have no official estimates of poverty. But the World Bank estimated India’s HCR to be between 8.1 and 11.3 per cent in 2017, as per the international definition of per capita income of $1.9 per day (at 2011 PPP). Using the same definition, the World Poverty Clock estimates India’s poverty at just 6 per cent in 2021. One can quibble with this definition as well as the estimates. But the irrefutable fact is that HCR has been going down, and this accelerated after 2004, when GDP growth touched 8.4 per cent per annum during the first seven years of the Manmohan Singh government.
Could India have done better? Of course, yes. If India had invested in better quality education for the masses, especially for the girl child, the results would have been much better. While India is proud of its IITs, IIMs and AIIMS, and its overall literacy rates going up from 12 per cent in 1947 to about 77 per cent now — with Kerala at the top and Bihar at the bottom — the quality of education for large sections of the poor remains poor. Year after year, Pratham’s ASER reports indicate that a large number of children in the eighth grade do not fulfil the learning requirements of the fifth or sixth grades. Without quality education, their incomes remain low and many remain stuck in the poverty trap. The pandemic has exacerbated the digital divide between rural and urban schoolchildren. So, a lot has to be done on this front.
What about basic food security? There has been tremendous success in this respect, with the country moving from a “ship to mouth” situation in the mid-1960s to become the largest exporter of rice (17.7 MMT) in 2020-21, amounting to 38.5 per cent of the global rice trade. This has been achieved through the use of modern technology, improved seeds, irrigation, fertilisers, and, of course, the right incentives for farmers. But it has come at a huge cost of groundwater depletion. Future policies need to focus on greater sustainability.
The question that bothers us is that if India has been so successful in reducing poverty and improving food availability, why does it have to give almost free food (rice and wheat) to more than 800 million people under the National Food security Act (2013)? However, malnutrition amongst children still runs high. This surely does not square with the facts above. India’s public grain management system of procurement, stocking and distributing is, perhaps, the biggest food programme in the world. But it is also an expensive, inefficient and corrupt system, and is crying for reforms. Look at the following facts: In 2020-21, as per the provisional estimates of the Controller General of Accounts, food subsidy amounted to 31 per cent of the total revenue of the Union government. Giving free rice and wheat, instead of improving the quality of education and enhancing skills, is definitely not the right way to go forward.
Our work at ICRIER on food policy shows that a rational policy of gradually moving towards cash transfers to targeted beneficiaries, limiting grain stocks, can easily save Rs 50,000 crore every year from the food subsidy bill. This can be achieved without sacrificing the objectives of supporting the vulnerable population as well as giving a fair deal to farmers. This rationalisation of food policy needs to come up high in priority, with changed policy instruments, if we have to fulfil the pledges we made to our people in 1947.