Food security and empty coffers

Abstract

The Food Security Bill is a fiscal extravagance we can ill-afford. The Food Security Bill, 2013 (FSB) has the approval of the Central government and will soon be discussed in Parliament. If press reports are to be believed, irrespective of the fate of the Bill in Parliament, FSB will be implemented in the States in which the Congress is in power. This, indeed, is a unique stance, for in a vibrant democracy such as India, batons change regularly between parties and there are no permanent jagirs. In the current situation, especially when the global economy is recording depressed economic growth, maintaining some fiscal space is very critical for any country. India already recorded a gross fiscal deficit (GFD) of Rs 5,20,925 crore (5.2 per cent of GDP) in 2012-13 which is expected to increase to Rs 5,42,499 crore (4.6 per cent of GDP) in 2013-14. And the food subsidy, as per the Budget, is estimated to increase from Rs 85,000 crore to Rs 90,000 crore over the period. Though the Expert Committee headed by C. Rangarajan had indicated earlier in 2011 that the cost implications of FSB would be large, recently, the Commission for Agricultural Costs and Prices (CACP) provided a starkly high estimate, meticulously calculated in its discussion papers released in December 2012 and May 2013. Read more at: https://www.thehindubusinessline.com/opinion/food-security-and-empty-coffers/article20645827.ece1