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Plan panel member makes a case for universalization of PDS

Second, food security cannot be attained without addressing issues of physical availability, distribution and stock management-it is not an issue about access that can be dealt with through transfers, either directly in cash or through coupons or by differential pricing.

India Infoline News Service

In a rare departure from form, Abhijit Sen, member, Planning Commission, has challenged the view voiced by a high-level government appointed committee and made out a strong case for universalization of the public distribution system (PDS) as the most feasible way to ensure food security. In a piece co-authored in the latest issue (19-25 March) of the Economic and Political Weekly, Sen, an economist, has argued that the two proposals, one by the National Advisory Council (NAC) headed by Congress president Sonia Gandhi and another by the committee under the chairmanship of C. Rangarajan, while welcoming universalization of food security, seem to prefer restricting it to the poor by targeting the benefits.


The Rangarajan committee was appointed by Prime Minister Manmohan Singh. Sen, along with with Himanshu (who uses only his first name), a professor in Delhi's Jawaharlal Nehru University and a Mint columnist, has suggested an MSP (minimum support price) linked PDS, excluding 25% of the population totally, for enacting the National Food Security Act, or NFSA. NFSA is United Progressive Alliance's (UPA) promise to the public as mentioned in the Congress party's manifesto in 2009. The Bill is yet to be drafted as there are diverse views on various aspects, especially coverage criteria. Sen's stand indicates that he has rejected the poverty-linked PDS, proposed by NAC and the Rangarajan committee, saying that linking it to poverty causes leakages as it excludes many from PDS participation.


"In preparation of the National Food Security Bill, the Planning Commission had presented a document linking PDS price to the minimum support price in July 2010, which should be the criteria for covering population under the proposed Bill. But both the NAC and the Rangarajan committee rejected it," Sen said. The NAC committee and the Rangarajan one had been set up to work out the details of the proposed NFSA. Though both councils have given their recommendations the final call has to be taken by an empowered group of ministers, or eGoM, headed by the finance minister Pranab Mukherjee. Sen has proposed merging elements of the NAC and the Planning Commission proposal. "This is done to be consistent with a rights-based approach, avoid the main problems of targeting, preserve the major benefits of universalization and also to reduce virtually to nil the possibility of demand rising so high that the government is forced to renege on its NFSA obligations," the article said. The article further argues that there are two central messages: One, that targeting has not worked and universalization is likely to reduce PDS leakage, not increase it.


Second, food security cannot be attained without addressing issues of physical availability, distribution and stock management-it is not an issue about access that can be dealt with through transfers, either directly in cash or through coupons or by differential pricing. "I stick to this view point," Sen said. Historically, he added, PDS price was linked to MSP and economic cost. Rangarajan, however, discarded Sen's theory that universalization plugs leakages. "Only streamlining of PDS will help." He further argued while the idea of universalization of PDS is fine, its not practical as there are not adequate grains to cater to it. "Since the total food stock is around 55-56 million tonnes currently, which also have risen from 36 million tonnes in 2007-08, it cannot take care of entire population covered under a universal PDS. The committee has, therefore, recommended legal entitlement to 46% of rural population and 28% of urban population.


The rest can be provided grains through an executive order," Rangarajan added. Planning Commission deputy chairman Montek Singh Ahluwalia, carefully avoided the issue of form and maintained that Sen's view was just "one more idea" and was similar to that proposed by NAC. "While NAC has talked about two levels of population to be covered, Sen and Himanshu have suggested three, with one section not be subsidized. The eGoM has to take a final call." On Tuesday, the eGoM deferred the decision to finalize the draft Bill. However, Y.K. Alagh, the economist who first designed the consumption-based poverty criteria, endorsed Sen's argument that targeting the poor will not work by defining a below-the-poverty line.


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