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Economy Jun 8, 2013

Not just cost, Food Bill will make us a nation of beggars

By S Murlidharan

While the jury is still out on whether the Food Security Bill (FSB), crafted and drafted by the UPA government at the centre, would bankrupt the treasury, what is certain beyond doubt is it would bankrupt the ideals and moral character of the nation sooner than later.

Serpentine queues in front of the numerous community kitchens that constitute one of the cornerstones of the Bill would be an eyesore harking back to the Dickensian era. Children, both school-going and others, pregnant mothers, the destitute and others would line up both at lunch and dinner time with begging bowls in their hands, as it were.

This beleaguered government somehow believes that the only way to get a person's vote is through his stomach - by giving him a free lunch and dinner. MNREGA, despite warts, has at least had the virtue of not giving a man the fish but providing him the means, albeit limited, to buy the fish. But with elections looming large, the ruling dispensation had to go for broke given its dismal track record, especially in its second innings.

Small wonder, it wants to return to power on the nearly free food platform which the FSB is all about. Apart from running giant community kitchens, it has the grandiose vision of providing foodgrain to as much as 67 percent of the populace at Rs 2 or Rs 3 a kg - virtually gratis. To be sure, the nation must take special care of pregnant women. But their dietary needs cannot be addressed by community kitchens. They need food rich in iron, protein and other nutrients and in larger quantities since the idea is also to take care of the fetus inside her. Lumping pregnant women with all and sundry is, therefore, another crude and ham-handed example of following a one-size-fits-all approach.

Will long lines for food be a result of the Food Security Bill? Representational image. Firstpost

Will long lines for food be a result of the Food Security Bill? Representational image. Firstpost

Running massive community kitchens would be a logistical nightmare and prone to corruption. Procurement officials must already be salivating at the immense and never ending prospect of making money on the sly by compromising with quality, over-invoicing and its concomitant kickbacks, etc. While, with some effort, a modicum of discipline in procurement of cereals and pulses can be brought about, handling perishables like vegetables and fruits, being a different kettle of fish, can challenge even the most foolproof systems. The humongous cost of maintaining the food bureaucracy, and the now well-established phenomenon of losses in foodgrain storage and distribution, are strong reasons to rethink this scheme.

Once the food is ready to be served, the problem would be how to tell the intended beneficiaries from the charlatans. Will age-proof be demanded of the children before they are served? Will a person be required to queue up before the community kitchen of his locality or his place of work or any place at all?

Food riots are all too common in the godforsaken parts of Africa. It could happen in India too if people accustomed to be being fed without having to work for it suddenly find that the gravy train has come to a screeching halt for the nonce. The food subsidy would be well targeted and well spent if the intended beneficiaries, like pregnant women and the destitute, are financially empowered with direct cash transfers. If the aggressive, macho male head of the family boozes away the money, the familiar refrain of the detractors, well God alone can help the family.

Had the UPA government followed up its MNREGA initiative with a stronger initiative on free healthcare for the flotsam and jetsam of society, duly cross-subsidised by the rich, which is what Obamacare is all about, it would have come out with flying colours. But for that to happen, our Finance Minister must overcome his reluctance to tax the rich meaningfully. The super-rich tax consisting of the 10 percent surcharge on those earning in excess of Rs 1 crore ushered in by the Finance Act, 2013, is as farcical as it is inadequate. It, at best, is a tap on their wrists.

A better way to tax the rich would be to tax share market gains by making bold to bring back the capital gains tax, and reach out to the colossal gains made by FIIs in India. No one is going to abandon India merely because it asks market participants to pay tax, a fear aired by no less than Finance Minister P Chidambaram himself often. If the British government can agonise over the tax lost by the alleged shenanigans of Google, why should India be pilloried by its own commentariat for seeking to tax Vodafone-like share transfer deals consummated in distant and clandestine islands?

A welfare state, or the one which wants to preen with pride as one, must be prepared to play Robin Hood to the hilt.

(The author is a chartered accountant)


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