1/23/2011

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A platter of blather
Pratap Bhanu Mehta Posted online: Fri Jan 21 2011, 02:04 hrs

The debate over food security is becoming an exercise in callow dissimulation, where we devote our energies to ensure that food security remains a mirage. The core objective should be simple. It is a scandal that after two decades of high growth, India still does not make adequate nutrition available to large sections of the population. There is simply no financial, technological or production related reason why this should be so. UPA-II decides to make food security a priority. But just see how the issues play out. We have become so self-referential, and so clever by half that we often don’t even notice the ironic enormity of what we are saying. Speaking the truth has become a way of avoiding reality. So let us cut through the chase. When the stories about rotting foodgrains broke, and the question arose “Why foodgrains should not be distributed?”, the response went something like this. The minister of agriculture said this was impossible. The chief economic advisor, with his characteristic clarity, claimed something to the effect that we simply did not have the mechanisms to release and distribute food. Perhaps there was an element of analytical honesty in this claim. But the shock is that we were not shocked by it. What was the government in effect saying? That after decades of procurement, food subsidies of Rs 50,000 crore a year, we simply had no mechanism to distribute grains we procured. This should be the mother of all scandals. But we patted ourselves on the back for our capacity for sophisticated economic thinking. Then prime minister’s Economic Advisory Council says we cannot procure enough foodgrains without distorting the market seriously. So here we are: one part of government says it cannot distribute and another says it cannot procure. Now at this point, to put it crudely, our response should have been, if you pardon the language, “What the hell CAN government do? Why does it even exist?” But we try to find a more sophisticated way around. The sophisticated response had three parts. The first was the Planning Commission (PC). Under some argument about feasibility it shoots down the idea that universalisation of food security is possible. This should have been a scandal for several reasons. First, as the JNU economist, Himanshu, has pointed out in a series of papers, the PC’s numbers on both grain requirement and cost are at the very least debatable. Second, the PC, if it genuinely has any role, should have at least had the courtesy of proposing an alternative scheme that met the core objectives. Instead, it acted as if its raison d’etre was not alleviating poverty, but saying no. Then comes the NAC. There are some members of NAC whose arguments have an internal intellectual integrity. But a lot of what NAC proposes is more about feeling good than doing right. It underplays design issues. Now it backs down under pressure and moves away from universalisation. In order to do so, it creates a new flimsy classification of different groups. But the construction of BPL lists is the biggest normative and practical hoax we have played on India’s poor. It is deeply wishful thinking that even more sophisticated classifications and entitlements will be implementable. And now that RTE admissions to elite schools may be linked to BPL lists, the incentive to game
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1/23/2011

www.indianexpress.com/story-print/740…

grows even higher. The case for universalisation is, in part, a practical one. Bharat Ramaswami has argued that there are three sources of distortion in food distribution: outright theft, re-diversion and targeting. Universalisation takes care of one important component. Now enters the even more sophisticated argument. Let us do cash transfers. Cash transfers are an appealing idea. In India, cash transfers are unfortunately seen as a substitute for governance. But cash transfers will require even more sophisticated governance. There will be a market response only if supply bottlenecks can be removed. UID is more compatible with universalisation than with targeting, but even that is probably a decade away. And, as one of the early proponents of cash transfers in India, Partha Mukhopadhya, pointed out, you still have the foodgrain problem. Government will still be procuring grain. So you will still have the challenge of pricing and releasing mountains of foodgrains, the very thing you claim you cannot do. Where do we go next? The predictable argument: “The states are the problem!” Of course some states are. But this claim, that the prime minister repeats endlessly, embodies both avoidance and arrogance on part of the Central government. In the history of ideas relating to social policy, the states innovate more than the Centre. Centrally sponsored schemes are a constitutional usurpation legitimised by the self-referential knowledge elites of Delhi. And the one thing the Centre refused to do was look at states that have done relatively better in PDS. Chhattisgarh seems to have solved the distribution challenge. Guess what Tamil Nadu did: universalise. So food security gets lost in arguments chasing their own tails. It is not surprising that something similar should happen to an aspect of food security: inflation. The arguments over the causes of inflation — supply bottlenecks, currency policy, global trends, monetary policy, weather, hoarding, speculative investment, deficit spending — no longer serve analytical clarity. They have become contrivances to avoid the core issue: there is a serious governance deficit that will stymie both public and private provisioning. But the dissimulation goes on. The government has had its head in the sand over inflation for a long time. The PC chairman’s reported claim that inflation has to do with rising wages was, in the context, a bit like blaming the victim. If he had blamed the Commonwealth Games for inflation, it would have been more plausible. If you want another example of obfuscation, see the debate linking NREGA to inflation. The same people who make the link also believe that NREGA is not working. So it is both not effective and causes inflation? How does this circle square? A lot of these arguments are like lawyerly interventions to produce a fog of doubt. Now the debate is whether NREGA wages should be index-linked. These wages should be lower than the minimum wage. But there is no justification for not making NREGA wage rises index-linked. Oh! We forget. Index-linked wage rises are only for government employees, who keep telling us that rising wages cause inflation. When we ask them to produce a credible roadmap for food security, all they can come up with is: Government does not work! The writer is president, Centre for Policy Research, Delhi express@expressindia.com

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