Opinion Pluses about pluses
Lets stop haggling over poverty numbers and move on food security....
The Planning Commission has correctly set its sights on food security. According to newspaper reports,its submission to the EGOM on food security is that the subsidy has to be targeted to need which in this case will be malnutrition and dual-pricing schemes may be necessary.
If your vision is clear,the technical work exists to push you ahead. Some adjustments will be needed but those can be made as you go,based on experience. But if your sights are wrong there is no end to the morass you will get sucked into,and a great idea will also get sunk. To give an example from the mid-80s,when industry was being decontrolled: the Bureau of Industrial Costs and Pricing was going to take a fully-controlled industry,give a quarter of the output in ration shops to the deserving needy,or the governments favourites,and leave the rest to the market. Given the ration need-based price we worked out the free-market price,which would give a sufficient incentive to produce more. The econometrics was new but the idea came from Samuelsons foundational economics textbook,and its discussion of rationing. I was asked then how I could be so sure of the econometrics,to the level of naya paise per kg. I said that,on the contrary,I was sure I was wrong at least within a range but the market will tell me how wrong. I am and we will correct the quantities,in the next round. We went ahead and in 18 months,shortages in that core commodity were history.
The Tendulkar Committee which,thank God,has been accepted by the Planning Commission and provides the base for a nuanced approach,has one powerful plus point and one weak one. The powerful one builds on the weak one,so start with that: the argument that the national poverty line should for the sake of continuity be the old urban poverty line which worked out the average calorie needs of the then-urban population does not hold water at all and so gets knocked by all and sundry. But the plus point of the Tendulkar poverty report is that on the old official (or Alagh) urban poverty line they have mapped the distribution of nutrition.
The first thing to note is that we are not talking of a single number or a unique poverty line. If all malnourished persons are the target you get one number; if only women are,you get another. If you are bothered as you should be about severely malnourished women you get another. The Tendulkar Committee has given us a powerful tool to work with.
We will of course make mistakes. To begin with,about all such estimates,only charlatans and some politicians are always sure. But,corresponding to market signals,Indias vibrant democracy will tell us where we are wrong. Everybody will want free food; who doesnt? But once it is known its not given,our people are realistic enough to accept that. Then those who are entitled under the nourishment no,malnutrition rules,will demand it,and NGOs will press the matter. Groups like Akshaya Patra and social leaders like Gopal in AP who have been working with a bag of grain employment scheme for rural development will lead the way. Areas and population cohorts of severe malnutrition or what is called chronic deprivation will need a special focus.
The really deserving must get food free. Here the Planning Commission seems to suggest some market elements and that is wrong. It will frighten away the really deserving and market logic can be carried too far. The commission talks of need. It must operationalise that.
Beyond that they are right. Though the idea that the above-poverty line population is entitled to grain from the PDS at minimum support price-plus is a googly,if there ever was one. The average Indian housewife is clever enough to stay away from the ration shop at an MSP-plus price. The local fellow is all right,thank you,why pay the FCI cost also?
But if the demands are unreasonable it is legitimate to give a non-operative solution as an answer to a non-problem. The upper-caste Indian philosophical mind strikes again: a double negative as a solution. One can conjure an adverse global situation where the APL population may have to buy from the ration shop at an economic price or MSP-plus-handling costs. But that will be seldom. An extra public policy rule using market principles which nobody ever uses never hurt anybody. Its not Occams razor but public policy is not an exercise in causal chain logic but in getting the best option practically possible.
The writer,a former Union minister,is chairman,Institute of Rural Management,Anand
express@expressindia.com
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