UPA's hand-to-mouth card
Noble food bill, timing questionable

OUR BUREAU

New Delhi, Dec. 18: The Union cabinet tonight cleared the Food Security Bill, a blockbuster initiative aimed at fighting malnutrition among millions and transfusing lifeblood into an anaemic government but carrying risks at a time the economy is sputtering.

Once voted into law by Parliament, the legislation is expected to provide over 63 per cent of the population a legal entitlement to cheap foodgrain. (See chart)

All the proposals made in the cabinet note were cleared, and the bill will be introduced in Parliament this week, sources said. The bill is likely to be sent to a standing committee and taken up for passage during the budget session.

The objective of the proposed law is "to provide for food and nutritional security... by ensuring access to adequate quantity of quality food at affordable prices, for people to live a life with dignity".

The food security proposal, close to Sonia Gandhi's heart and piloted by the National Advisory Council (NAC) headed by her, is being seen as bigger than the rural job guarantee scheme, one of the factors that purportedly played a role in bringing the UPA back to power.

However, a key difference has been at play between then and now. The economy was growing at a robust rate when the job scheme struck root.

This is no longer so. The new initiative comes at a time growth is faltering and the fiscal deficit is widening, prompting some analysts to term the timing of the cabinet clearance as irresponsible.

The erosion of the government's credibility in the wake of corruption scandals and knee-jerk responses is also prompting many to question the timing, especially since the drive precedes the Uttar Pradesh elections and coincides with a perception of "policy paralysis".

"When you think what this means for public finances, you know the government is living for the day," an analyst with a think tank told Reuters.

The bill could not be approved by the cabinet last Tuesday because of differences among UPA allies, revolving particularly around fears about the ability of the government to bear the financial burden of such an ambitious welfare scheme.

According to estimates made by the government, the burden is pegged at Rs 94,973 crore a year, Rs 27,973 crore more than the current subsidy bill of Rs 67,000 crore.

However, food minister K.V. Thomas put the total financial liability at Rs 3.5 lakh crore as funds would be required to raise agricultural production, create storage space and generate awareness.

Agriculture minister Sharad Pawar and renewable energy minister Farooq Abdullah had raised the red flag at the last cabinet meeting and sought more discussions.

Pawar was said to have argued that only the poor and the underprivileged should be entitled to subsidised food, adding that apart from the financial implications, it would affect the agricultural economy. Abdullah supported him and the bill was postponed for further discussions.

However, given Sonia's personal interest and a reported nudge, the cabinet took it up today and cleared the proposals in the note without making any changes.

Few question the noble objective behind the legislation — described as "the greatest experiment in the world to provide food security to the poor". It also has several features aimed at tackling malnutrition among children and lactating mothers.

But the UPA's recent somersaults have raised questions whether it has the will and the political suppleness to see through harder measures that will be needed to keep afloat such welfare schemes.

As minister Thomas pointed out, enormous resources are needed to implement food security. In the absence of investment-generating initiatives, it is not clear how the government plans to bankroll the programme. With the economy losing steam, the government's revenues are expected to take a knock.

The government's record has not been inspiring on taking tough decisions. At the first hint of trouble, the government retreated from the plan to clear foreign direct investment in retail. But the food bill is expected to win the support of all parties, though not many are likely to come up with ideas on how to pay for it.

Asked about the nitty- gritty, Thomas said: "All these things will be spelt out when the bill is introduced in Parliament at the earliest."

He added: "It is an important bill and I feel relieved that the cabinet has okayed it."