Perils Of Lowering Food Security Cover

Context: The NITI Aayog’s proposed reduction in coverage of the National Food Security Act could reverse the gains India has made in reducing malnutrition.

Background:

• National Food Security Act (NFSA) 2013: made access to a designated quantity of food-grain a legal entitlement.
  • Coverage: 67% (813.5 million Indians) of the population (75% in rural and 60% in urban India) is entitled to the scheme (2011 Census data).
  • Annual expenditure: around Rs 1 trillion a year until FY2019-20 and expected to be Rs 2.43 trillion in 2021-22 (mainly due to inclusion of off-budget borrowings in the budget).
• NITI Aayog’s proposal: lower the coverage to 50% in rural areas and 40% in urban areas, resulting in an estimated annual savings of up to Rs 47,229 crore.
  • Rationale: savings from food subsidies could be used for health and education.

Loopholes in food security law:

• Exclusion error: The number of beneficiaries is divided among states using the government’s Household Consumer Expenditure Survey of 2011-12 (HCES), which have been frozen since 2013 and not updated.
  • According to a study (using the 2011 data), even in 2020 excluded 100.8 million eligible beneficiaries from the NFSA.
  • The highest under-coverage was in Uttar Pradesh (30.6 million) and Bihar (17.5 million), which received a huge number of returning migrants during the covid-led lockdown.

Benefits of the food security law:

• Reducing malnutrition: Between 2005-06 and 2015-16, the share of the undernourished population in India fell from 44.3% to 21.2% (National Family Health Survey (NFHS).
• Public Distribution: According to HCES, 45.9% of rural households and 23.3% of urban households reported consumption of rice from the public distribution system (PDS).
  • Poorer states such as Bihar (40.9%), Jharkhand (36.6%) and Uttar Pradesh (31.4%) continued to be dependent on the public PDS

Conclusion: As a significant population is dealing with the economic fallout of the pandemic, lower coverage could stress them and reverse some of the malnutrition gains.