FEEDING INDIA
The biggest takeaway in India's fightback against the covid-19 pandemic, has been the roll out of what is the world's largest food security programme. EPISODE #68
Dear Reader,
A very Happy Monday to you.
Last week a working paper from the International Monetary Fund (IMF), co-authored by India’s executive director at the IMF Surjit Bhalla, claimed that extreme poverty has declined in India. Further, it argued that the massive intervention by the union government to mitigate the devastating fallout of the covid-19 pandemic, had served as a safety net to contain any reversal in this trend. Typical of the binary debates defining India and the world, this has ignited another fiery face-off where fact and fiction are mixed.
Regardless, these developments have put the spotlight on what is clearly the largest food security food programme in the world; now extended till September. This week I explore the contours of the programme and how it has served as the bulwark in India’s fight back against the covid-19 pandemic fallout.
This week’s cover picture is of a near empty subway one mid-afternoon on a scorching summer day in Delhi.
A big shoutout to Ranjini, Rajiv, Dr Majumdar, Gautam, Kapil and Aashish, for your informed responses, kind appreciation and amplification for last week’s column. Gratitude also to all those who responded on Twitter and Linkedin. Reader participation and amplification is key to growing this newsletter community. And, many thanks to readers who hit the like button😊.
FOOD SECURITY
Exactly two years ago, when the first wave of the covid-19 pandemic, which had dodgy origins in Wuhan, China, was taking off in India Finance Minister Nirmala Sitharaman called a press conference and announced a Rs1.70 lakh crore relief package—the bulk of which was earmarked for those at the bottom of the pyramid—to mitigate the fallout of covid-19.
This package included the PM Garib Kalyan Ann (अन्न) Yojana (PMGKAY), the free food grain programme. The package extending to 800 million people—two-thirds of India’s population—entitled them to an additional 5kg of food grains. This effectively doubled their entitlement. Further, the government also announced that each family would be entitled to 1 kg of pulses.
For the poorest of the poor, the additional allocation was over and above the 35 kg of food grains they were already receiving per family.
Initially the scheme was launched for a period of three months. But as the impact of the lockdown of the economy began to unfold the union government decided to periodically extend the scheme. On 26 March they announced the sixth phase which will end this September.
The latest phase is projected to cost the exchequer an additional Rs80,000 crore (equivalent to the average pay out annually under the rural employment guarantee scheme prior to covid-19). Till Phase-5 ending March 2022, the government allocated 759 lakh tonnes of free food grains under PMGKAY. Another 244 lakh tonnes will be allocated in the next six months. So by September 1,003 lakh tonnes of free food grains would have been distributed.
By September, the union government will have spent a staggering Rs3.40 lakh crore to fund the allocation of 1,003 lakh tonnes free food grains to ensure food security in the post-covid era. If you include the food security programmes undertaken independently by some states, then the overall budget is even higher.
In short, whichever way we look at this, this is undoubtedly the world’s largest food security programme. The unfortunate situation playing out in Sri Lanka right now should hold a mirror to the curve ball India avoided by adopting this strategy.
Continuity
Interestingly the idea of food security has bi-partisan consensus dating back a decade. And this foundation is what has enabled the extraordinary effort that we witnessed in the last two years.
Yes, the Supreme Court had weighed in on the matter in the first decade of this Millennium and directed the union government to legislate food security as a right. Alarmed by the fiscal cost it entailed the Congress-led United Progressive Alliance (UPA), which was at the helm then, dragged its feet.
However, it could not dodge the bullet forever. And despite resistance from within the Union Cabinet cleared the law to be placed before Parliament. In turn, since no politician would want to be seen opposing an idea like universal food security, the law found support on both sides of the aisle.
Eventually the law was enacted in 2013 with this key commitment:
“The Act provides for coverage of upto 75% of the rural population and upto 50% of the urban population for receiving subsidised food grains under Targeted Public Distribution System (TPDS), thus covering about two-thirds of the population.”
Success
To its credit the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) worked on improving its inheritance.
It accelerated the computerisation of the Targeted Public Distribution System (TPDS), including the installation of electronic Point of Sale (ePoS) devices at the Fair Price Shops (FPS) spread across 731 districts.
As this screenshot sourced from the government’s dashboard indicates the process is nearing saturation coverage.
The NDA then went one step further and seeded the Aadhaar number, the 12-digit unique identity, of 800 million beneficiaries with their ration cards.
Not only did this enable Direct Benefits Transfer (DBT), eliminating corruption by cutting out the ubiquitous middleman, it also laid the basis for the next big technology powered innovation in public policy: One Nation, One Ration Card (ONORC).
Now any beneficiary could walk-in to any FPS anywhere in the country that is equipped with an ePoS and authenticate themselves with their Aadhaar biometrics to claim their entitlements either in full or in part. This is a big boon to the migrants who previously would either lose out on their allotment or would have to travel back home to claim it.
Data tracked by the government on DBT over the last two years is revealing.
Clearly, the the DBT in-kind has—reflecting the bump up in the food security programme—surged over the last two years. In value terms it has more than doubled from Rs1.4 lakh crore in 2019-20 to Rs 3.1 lakh crore in 2021-22.
Controversy
Somehow, instead of celebrating this gigantic and impressive effort in providing food security to 800 million people—failure to do so, as I pointed out earlier, would have had devastating consequences—we find ourselves entertained by an acerbic debate on poverty in India.
This is because two papers published independently by scholars at the World Bank and the International Monetary Fund. Coincidentally both were published this month—just a week after the union government extended the food security plan till September.
The IMF working paper uses its own proprietary research to track poverty and consumption inequality in India for each of the years 2004-5 through to the pandemic year 2020-21. They examine the effect of in-kind food subsides and conclude, among other things, that the food security plan prevented extreme poverty from worsening. Please click this link if you wish to read the paper.
Similarly the working paper published by the World Bank employs a proprietary research methodology to establish, among other things, that extreme poverty declined by 12.3% between 2011-19. However it argues that the decline in overall poverty levels has been overestimated. Please click this link if you wish to read the paper.
The simplest takeaway from both papers is that extreme poverty has declined in India. Intuitively this seems correct. Census 2011 revealed that India had traded up—previously if you were walking you were cycling and so on—in the first decade of this Millennium. This does not mean that the war against poverty is over. Of course not. It is just that the goalpost has been moved.
If you unpack these academic papers thus the controversy disappears. Like always it is an initial critical view which is quickly coloured with tangential interpretations of facts and passed off as news by sections of the media. Quickly the noisy rhetoric eschews any rational conversations.
Poverty Legacy
Tragically India is far from eliminating poverty. The legacy of neglect and unbridled corruption in delivery of anti-poverty programmes has not only failed the policy objectives, worse it has created an enormous trust deficit between the public and the government.
At the moment it is safe to work with the target group covered under the food security plan—these 800 million people are economically vulnerable even seven decades after Independence. I believe it makes more sense to work with vulnerability as a metric, since it customises the mitigation solutions—one size cannot fit all.
In fact, one message from the just concluded state elections was about electing regimes that the public believed would address the challenges of their material circumstance. So the Aam Aadmi Party was elected to power in Punjab on the promise of ending the rot in the state, while the BJP got re-elected in Uttar Pradesh, Uttarakhand, Goa and Manipur on their record in delivering basic livelihood needs like food, housing, electricity, drinking water and so on.
Sharing the link to my recent piece unpacking the poll verdict.
In fact, the challenge for all political parties, especially the BJP, the new pole of Indian politics, will be to address aspirations of those who are being bootstrapped out of extreme poverty. But that then is a different story for another day.
For the moment let us celebrate the unprecedented success of India’s food security plan during the covid-19 pandemic. Especially since the architecture was developed through progressive iterations involving ideologically opposed political regimes and powered by home-grown, but world class, technology.
To put it simply it is a public policy move that enjoys political consensus. A double whammy.
Recommended Reading
Staying with the theme for today I am sharing my monthly contribution to the edit pages of the Economic Times.
In this piece I argue how the latest round of state elections has put the spotlight on the guarantee of livelihood security as an electoral draw.
“The economic devastation caused in the aftermath of the Covid-19 pandemic only made a bad situation worse. But for the free food grains supplied to 800 million people for the last 18 months through the public distribution system (PDS), the livelihood crisis would have morphed into a catastrophe of unimaginable proportions. In UP, the 15 crore beneficiaries received edible oil, dal and salt as part of this package.
As the results indicate, a key cohort of the beneficiaries of these benchmarks of livelihood security, women, have now been electorally weaponised. It has disrupted the traditional electoral arithmetic defined around the fault lines of caste and religion, something that can dramatically rewrite the existing poll narrative.
To be sure, no one factor - except fierce anti-incumbency - decides an electoral outcome. The case here is that newly empowered cohorts are emerging as powerful vote banks that can rival those defined around caste and religion.”
If you wish to read the piece please click here.
Till we meet again next week. Stay safe.
Dear Anil,
Another comprehensive, informative and interesting article on a very debatable topic.I feel with the fiscal deficits of all the states increasing continuously, is it wise to keep give free ration ,electricity and other benefits to increasing number of people?
Once you start these programs, they cannot be stopped as govt cannot risk becoming unpopular with elections not far away.Agree the Pandemic has been cruel and resulted in increasing poverty , joblessness and hardships but We have to see the financial implications of social welfare schemes also.But I do agree with you India has done a great job in feeding millions of its citizens.
A very important article; although initially I found it just a narrative of a well known situation but I sat up and took notice of the steady increase in benefits for ration card holders who could avail the subsidised ration anywhere in the country; mainly due to the linking of ration cards with the biometrics in the adhaar card. A wonderful piece of innovation, which has reached the poor both in the rural and especially in the urban areas. Once again a unique piece of enlightenment gained by reading the weekly Capital Calculus.