A tryst with destiny? Fulfilling pledges made to the nation in 1947 will need reform of food subsidy policy

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August 02, 2021 5:00 AM

India’s public grain management system of procurement, stocking and distributing, is perhaps the largest food programme in the world. It is also the most expensive, inefficient, and corrupt, system, crying for reforms.

But many Leftists disputed the poverty line, and then the C Rangarajan committee estimated HCR poverty at 29.5% in 2011.But many Leftists disputed the poverty line, and then the C Rangarajan committee estimated HCR poverty at 29.5% in 2011.

India will soon be celebrating its 75th Independence Day, and kicking off a year-long celebrations. But, before doing so, it would be good to reflect and see how India’s ‘tryst with destiny’ has played out over all these years. Independent India started its journey with deep wounds of partition, with a population of roughly 340 million, of which more than 70% was extremely poor, and only 12% was literate. India was a sea of massive poverty and ignorance.

Winston Churchill had 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”.

But Jawaharlal Nehru was optimistic, and 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 poverty and disease and inequality of opportunity”.

It is against these predicaments and pledges that we need to assess how far we have travelled. Depending upon which side of the prism one is looking at, one can find both Churchill and Nehru right in varying degrees. But, here, let me focus on the basics: poverty, illiteracy, and food.

From more than 70% poor in 1947, head-count ratio (HCR) of poverty in India dropped to 21.9% in 2011, as per erstwhile Planning Commission, based on 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 from 1947-91.

But many Leftists disputed the poverty line, and then the C Rangarajan committee estimated HCR poverty at 29.5% in 2011. We have no official estimates of poverty after that. But, World Bank estimated India’s HCR to be between 8.1% and 11.3% in 2017, as per the international definition of per capita income of $1.9 per day (at 2011 PPP). Using the same definition, World Poverty Clock estimates India’s poverty at just 6% in 2021. One can quibble with this definition as well as estimates, but the fact remains that the trend of HCR has been downward, which accelerated after 2004 when GDP growth touched 8.4% per annum during the first seven years of the Manmohan Singh government (2004-11).

Could India have done better? Yes, provided India had invested in better quality education for masses, especially the girl child. While India has excellent IITs, IIMs, and AIIMS, and its overall literacy rates improved from 12% in 1947 to about 77% now, with Kerala at the top and Bihar at bottom, its quality of education for masses remains poor. Pratham’s ASER studies clearly show that children even in the eighth grade do not fully qualify for the fifth or the sixth. Without quality education, their incomes remain low, and they remain stuck in the povery trap. Pandemic has further created a digital divide between rural and urban school children. So, a lot needs to be done on this front.

What about basic food? Green Revolution helped India move from being in a ‘ship to mouth’ situation in the mid-1960s to becoming the largest exporter of rice (17.7 MMT) in FY21, amounting to 38.5% of global rice trade. But it has come at a huge cost of groundwater depletion. The future policies need to focus on greater sustainability.

But 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? India’s public grain management system of procurement, stocking and distributing, is perhaps the largest food programme in the world. It is also the most expensive, inefficient, and corrupt, system, crying for reforms. In FY21, food subsidy accounted for 31% of the total revenue of the Union government. Instead of giving education and skills training to teach people how to catch fish, giving free fish (rice and wheat) every day is definitely not the right way to go forward.

Our work at ICRIER shows that a rational food policy of gradually moving towards cash transfers to targeted beneficiaries can cut food subsidy bill by Rs 50,000 crore every year. Food policy reforms needs to be expedited if we have to fulfil the pledges we made to our people in 1947.

The author is Infosys chair professor of agriculture, Icrier

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