Opinion The real way to universalise
Universal PDS doesnt even make sense as a phrase....
That crores of citizens in a country proud of its growth and rising international stature are malnourished should create a sense of urgency about ushering in the promised food security act. Discussion should centre on innovative and effective ways of transferring the food subsidy; but instead progress has stalled over trivial issues,the latest being the questions over the exact number of people below the poverty line (BPL). However liberal a criterion the state uses to identify the poor,it is bound to deprive a significant number of the poor of their right to food security.
Some have made a strong case for universalising the Public Distribution System (PDS),pointing out some glaring problems in deciding the BPL population. First,capping the BPL number and only then deciding the criteria for inclusion in the BPL list is fundamentally at odds with the spirit of food security. Second,there is no sharp division between the poor and the non-poor. No matter where the poverty line is drawn,it would be ridiculous to claim that people who are marginally above it are not suffering almost the same hardship. Third,a stroke of bad luck such as a crop failure,a natural disaster,a lost job or illness can render someone listed as above the poverty line extremely vulnerable. Fourth,local power structures in rural areas could manipulate lists. All this makes the issue of confining the beneficiaries of a food security act to an arbitrarily defined section of the population called the poor highly problematic.
There is,thus,a strong case for a universal food subsidy system. Of course this will be at the cost of including in the system a segment of population that is quite well off. But for a country in which 47 per cent of children are malnourished and a majority of the women are anaemic,the primary concern should be about the needy we exclude rather than the not-so-needy that we include.
But,even if we universalise food subsidy,do we need the PDS? Is that the best way to eliminate the possibility some of the truly needy are excluded? In fact,it could be claimed that the very phrase Universal PDS is a contradiction in terms: a significant part of even those currently covered are excluded in practice,thanks to the PDS. Any system like the PDS which supplies cheap foodgrain through a channel parallel to the market will exhibit the diversion of grain to the open market. In fact,it is exactly when prices rise,and the poor need more cushioning,that the incentives for illegal diversion also increase. One recent study,by Bharat Ramaswami and Shikha Jha,revealed that 43 per cent of food subsidy is wasted in leakage,and another 28 per cent in the governments inefficiency in storing and distributing foodgrain. Unsurprisingly,in many parts of India,the PDS is virtually absent for the poor.
What then is the point in universalising such an inherently corrupt and wasteful system? Should we not continue to focus on alternatives such as food stamps or smart cards for the transfer of food subsidy? A chapter in the Economic Survey,2010,discusses the merits of these alternatives,but they are hardly mentioned in the discussions taking place today.
Some mention that the PDS works well in Chhattisgarh,and other states should follow its example. Yet the very fact that such examples,of a well-functioning PDS,are so few is a clinching argument against continuing with this flawed and failed system. Is Chhattisgarhs success sustainable? At the moment,there exists the required political will. But for how long? And why should we leave the fate of the poor and hungry to the improbable event that all other states would magically strive to emulate Chhattisgarh and transform the functioning of their public distribution systems? Instead,it is better to rely on systems such as food stamps (or coupons) or smart cards that are less susceptible to corruption by design.
Another point claimed in favour of a universal PDS is that it would have the built-in advantage of self-selection. In other words,those who are not truly needy would not bother going to ration shops,and thus the fiscal burden would be lower than under a smart-card system. However,this does not make the PDS cheaper than its alternatives,as long as to transfer one rupee of subsidy the government has to spend well over three rupees. Obviously,any system that transfers the subsidy directly will save a significant part of this cost,which will far outweigh any saving achieved by self-selection.
Universalising Indias food subsidy is an excellent idea,as it will then include all those who are truly needy but are presently not classified as poor. But continuing with the PDS a proven failure will only ensure that we continue to fail the poor.
The writer is a policy researcher with Pragati Abhiyan,Nashik
express@expressindia.com
Share
