Why states must not use central food grains for non-entitled categories

The distribution of free rice is much in debate these days. I would like to put a few things in perspective. The National Food Security Act (NFSA), implemented in 2011, ensures that 67 per cent of the national population, or roughly 80 crore citizens, gets free or subsidised food grains. This covers the entire weaker and vulnerable section of the population groups in India. It is perhaps the biggest social welfare programme of its kind ever taken by any country in the world.

On an average 75 per cent of the rural population and 50 per cent of urban receives this free ration. In certain states this figure has crossed even 85 per cent for rural population and more than 75 per cent of urban. Even for some progressive states, the figures for free ration remain at 75 per cent for rural areas and 50 per cent for urban areas. Various estimates by economists suggest that poverty in India has declined significantly since 2011, when NFSA was brought in.

As one example, the gross state domestic product at factor cost of Karnataka (a state where issue of additional fee rice is simmering) increased from Rs 6.06 trillion to Rs 20.49 trillion from financial year 2012 to 2022. It was more than a 3.5 fold increase. Karnataka’s per capita income increased from Rs 129,986 lakh in 2013 to Rs 331,981 lakh in 2022, growing at an average annual rate of 11.10 per cent. So while the state’s income improved, the percentage of population that got free ration remained the same at 75 per cent for rural areas and 50 per cent of urban areas. Needless to say, more people in non-entitled categories are now availing of free ration. States need to rationalise the distribution size of PDS on the basis of data about ground realities and enhanced standards of living and disposable incomes so that the poor and deserving get more support. Continuing with old estimates means that precious food grain is also being given to non-entitled categories at the cost of the poor and more deserving. Subsidy serves the purpose best provided it is rightly targeted.

At a time when we possibly should have been talking about revisiting the scale of these subsidised operations in favour of poorer sections of the society, recent debates about more free rice to certain states rather unsettles the balance in favour of the well-to-do class. Pressures are being created to increase the scale and size of food subsidies, and that too at the expense of the need to maintain buffer stocks and keep food inflation under check through open market operations. Any additional coverage of the free-ration scheme in any form by any state is only going to benefit those who don’t really need it, and more importantly they don’t deserve it. Vital national resources should not be used like this.

The Centre’s recent decision to discontinue Open Market Sale Scheme (OMSS) for states should not be interpreted as a step towards any discrimination but better targeting of subsidies and optimal use of resources for the benefit of poorer sections of the society. This distribution consists of wheat and rice, essentially. The buffer stocks of the Food Corporation of India (FCI) and the Centre need to be always kept handy to keep inflationary pressures away. The decision should not be politicised and be seen objectively. States should not be using FCI food grains for non-entitled categories. That is neither in the interest of states nor in national interest.

Many states have from their own resources added special coverage for edible oil, pulses and eggs to the existing provisions under NFSA. The Centre encourages them from supplementing these additional benefits. There is definitely a case to add protein and fat to the existing scope of subsidized distribution. But to add more carbohydrates in the form of rice is surely not the need of hour, and at what expense?

As far as the food and public distribution ministry is concerned, the primary intentions of the government are three fold. First, to keep an adequate buffer of food grains. Second, to provide food grains at very affordable prices to the needy. Third, to keep prices of the essential commodity under check in a manner that while normal consumers get the same at reasonable prices, the farmers are also able to get fair remuneration for their produce. This requires a fine balancing act. The Centre’s latest step is to be seen as a critical balancing act that had to be undertaken.

The decision to discontinue the sale of wheat and rice under OMSS (Domestic) is focused on controlling food inflation. National interest is supreme .In recent years, production of agriculture crops was affected due to untimely rains and temperature rising in March. Therefore, the stocks available with Food Corporation of India are released in a judicious manner under the OMSS (D) by the central government while ensuring that the overall stock position is maintained at a comfortable level.

Inflation is a very sensitive subject for planners and no government can afford to take it lightly. It keeps taking varied kinds of steps to keep the inflation under control. Inflation in food grains can have serious ramifications for the masses and that can take away a significant portion of their monthly or daily wages. The Centre’s decision to discontinue with OMSS to states is in the interest of the entire nation and it is a welcome step.

The decision by FCI to discontinue the sale of wheat and rice under OMSS(D) would also discourage states to think about rationalisation, introspection and possibly desist from using the same for the non-entitled categories.

(The writer is former secretary, Food & Public Distribution.)

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