Let’s Strengthen And Not Dilute The National Food Security Act

Context: The recently proposed reforms in the reduction of beneficiary covered under the National Food Security Act (NFSA) is problematic. Rather, We must widen its coverage to feed the needy.

Proposed reforms:

• By NITI, Aayog: suggested a reduction in coverage of beneficiaries under the National Food Security Act (NFSA) from 75% of the population in rural areas to 60%, and from 50% to 40% in urban areas.
  • Rationale: This will lower India’s food subsidy by Rs 47,229 crore. This is not the only proposal to reform the NFSA.
• By Economic Survey: suggested hiking the issue price of foodgrains from the existing Rs 3 per kg for rice, Rs 2 per kg for wheat and Rs 1 per kg for coarse cereals through the public distribution system (PDS).

Issues associated with the suggestion

• Not based on independent evaluation: Consumption expenditure surveys, which were used to evaluate the PDS, are last available only for 2011-12.
• A misplaced pursuit to lower India’s food subsidy: The direction of the reforms is based not on any objective evaluation of its functioning and efficacy but on the necessity of reducing our food subsidy.
  • Even this is a misplaced pursuit since the food subsidy to the Food Corporation of India is based on past payments.
  • Excluding loan payments for next year, the food subsidy bill stands at just 1% of GDP, which is almost the same as it was before NFSA was implemented.
  • Overlooking the real issue of mismanagement of food procurement and storage: As of 1 March, FCI had 80.5 million tonnes of rice and wheat, which is almost four times the buffer requirement.
• Regressive in nature: Negate the goal of expanding coverage under NFSA by making it quasi-universal and going back to the era of targeted distribution.
• Lack of institutional mechanism to reduce beneficiaries: Data void as the Socio-Economic Caste Survey is almost a decade old.
• Impending threat on nutritional security: National Family Health Survey (NFHS-5) has shown stagnation/reversal of gains made on the nutritional front, which could further slip due to pandemic.

Way forward

• Make NFSA universal: At least until stocks are exhausted, or our economic situation returns to normal.
• Include essential nutrients such as pulses and edible oils: Since India is a net importer of both, bringing them under the NFSA will increase productivity through better incentives and ensures nutritional security.