India’s food scheme: Cheating the hungry

The Indian government’s new $19-billion food scheme to feed two thirds of the population, as well as the ruling party’s political fortunes, depend in large part on hundreds of thousands of shopkeepers.
Under new legislation passed in the lower house of the national Parliament on Monday, about 800 million people will be entitled to five kilograms per month of subsidized grains from shops like these.
But the current distribution system is dogged by complaints from customers that they are routinely shortchanged on their rations by shopkeepers, who then sell the extra grain on the black market to help compensate for their own thin earnings. The scheme — which will add 230 billion rupees ($3.8 billion) to India’s annual food subsidy costs — is designed to tackle deep-rooted malnutrition, which still afflicts an estimated 42 percent of Indian children.
Deaths caused by starvation are rare but still a reality in contemporary India and images of stunted and malnourished children have become a source of shame for the government of an aspiring superpower.
Any Indian family can apply for a ration card at present and receive 35 kilos of subsidized grain, an official in the food ministry explained, adding that the new legislation will cover 67 percent of the total population.
“So the coverage will be more targeted,” he said.
As well as changing the criteria for the entitlements — handouts will be mostly per capita instead of per family — the prices at Fair Price Shops will be reduced to as little as one rupee per kilogram. Indian consumers have been reeling from rocketing food prices for most of the government’s term and voters have told pollsters that the cost of basic goods is foremost among their concerns ahead of elections next year.
But the popularity of the program, which was temporarily activated as an executive order by the president in July, will depend on the inefficient national network of public granaries, transporters and 500,000 ration shops. One widely quoted study published in 2005 by the Planning Commission, a government advisory body, found that 58 percent of grains in the Public Distribution System (PDS) failed to reach their intended destinations.
Ashok Gulati, chairman of government’s Commission for Agriculture Cost and Prices (CACP), describes the PDS as like “carrying a bucket full of water that is 40 percent broken.”
“The biggest challenge is not restructuring, the biggest challenge is plugging the leakages,” he said.
An additional five million tons of publicly procured food grains will be pumped into the PDS to meet the new demand in the current year.
Arvind Subramanian, an economist, wrote recently that “it’s as if an emaciated, old man struggling to carry a load of stones is asked to carry another load because that will strengthen his muscles.”
Other recent surveys have found improvements in the system, however, with the central state of Chhattisgarh emerging as an example for the rest of the country on how to make changes.
A large study in nine states in 2011 found that 97 percent of eligible respondents received their quota there, compared with just 18 percent in impoverished northern Bihar.
Economist Jean Dreze, who advised the government on the legislation in the early stages, agrees it could have forced more reforms of the PDS. The fact the system it is not computerized he says is a “scandal.” But he says people will be more aware of their entitlements and the system will make better use of the millions of tons of food grains which the government is already committed to buying from farmers.
“The state governments are coming under a lot of pressure. I think there’s a chance that it will lead to huge improvements in the effectiveness of the PDS,” he said.
“It addresses a huge thing that is holding back the country economically and in terms of human welfare,” he added.