On May 13, the Supreme Court issued an interim order to the Central government and the governments of Delhi, Haryana and Uttar Pradesh to provide dry rations to migrant workers in the National Capital Region under the Atma Nirbhar Bharat Scheme or any other scheme through the public distribution system (PDS) prevalent in each state with effect from May 2021, as also to open community kitchens for the stranded migrant labourers, in addition to facilitating transport for those who want to return to their home.
In Delhi, which last year saw huge reverse migration, the right to food activists have been urging the government of National Capital Territory of Delhi for months to start free rations and cooked meal services. But it took the SC order for it to swing into action and issue a notice on distribution of rations in an order dated May 14.
This year, as the second wave of the COVID -19 pandemic has hit the country much harder than the first wave in 2020 in terms of the incidence of disease, there have been job losses once again, leaving the working class population with little to survive on. The same struggles for arranging food, rations, going back home – of basic survival - have resurfaced. While on the one hand, we have witnessed the crumbling public health system and loss of lives due to systemic failure, with no oxygen, no beds, no ventilators, we are also witnessing the government’s failure to galvanise the PDS and provide even one square meal in these times of severe distress.
It was only after that three States -- Rajasthan, Kerala and Uttarakhand -- and some Members of Parliament urged the Central government to restart the distribution of free foodgrains to 80 crore poor under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), that the Centre announced the scheme PMGKAY-III for the months of May and June. The allocation of additional foodgrain free of cost to approximately 80 crore individuals under the Targeted PDS (TPDS) @ Rs5 Kg per person per month for the two months is over and above the regular quota under the National Food Security Act or NFSA. Moreover, this year the provision does not include pulses, which compromises the nutritional aspect.
Food rights activists, however, have been suggesting that the scheme be extended for at least six months, given widespread distress due to the pandemic. In fact, on May 1, 2021 on the occasion of International Labour Day, a joint platform of 10 central trade unions demanded cash transfer of Rs 7,500 per month for all non-income tax paying families and 10 kg free foodgrais per person per month for the next six months.
It must be noted that this estimate of about 80 crore poor in the country, who are beneficiaries under the NFSA, 2013, is based on the 2011 population census. Experts have time and again highlighted that this is a gross underestimation. As per the estimates worked out by Jean Dreze, Ritika Khera and Meghana Mungikar (as reported in IndiaSpend report in April 2020) , the system leaves out more than 100 million people from its reach.
Under NFSA, the PDS is supposed to cover 75% of the population in rural areas and 50% in urban areas, which comes to 67% of the total population. According to them “At the all-India level, applying the 67% ratio to a projected population of 1,372 million for 2020, PDS coverage today would be 922 million, instead of around 800 million”
Hence there has been a strong demand for universalisation of PDS. Given such gross underestimation, there is a strong case for making the scheme universal, which the activists have been constantly demanding.
However, recently at the launch of mobile App 'Mera Ration', the Food Secretary, Union Government Sudhanshu Pandey had stated that there is no proposal at present to revisit the coverage of people benefiting from the NFSA. In 2015, the Shanta Kumar Report on Food Corporation of India (FCI) Restructuring had suggested revisiting the coverage of people benefiting from NFSA.
Arguing a case for universalisation of PDS, Reetika Khera and Anmol Somanchi (August 2020) undertook calculations and stated that across the country there are about 95 crore people who are getting some entitlement or the other. Due to inadequacies in the reach of the NFSA, many states went beyond central NFSA norms and are running expanded PDS. Thus, in total, these 95 crore beneficiaries include – 1) NFSA beneficiaries, 2) people covered by NFSA Equivalent Entitlements or More and 3) people covered by Lesser Entitlements, as against NFSA. In order to make the PDS universal, more than 40 crore people need to be covered, as they do not get any food support from the government.
Food stocks are sufficiently over the food stocking norms and can be utilised for the purpose. As on April 1, 2021 the total food stocks were 564.22 lakh tonnes (LT) (wheat - 273.04 LT and rice - 291.18 LT). The food stocking norms for April 1 are 210.40 LT.
The case of Kerala has been exemplary as it has been able to manage the livelihood crisis by ensuring regular supply of monthly food kit to people and organising community kitchens. The Kerala government had started this in March 2020 and has announced its continuation, also making it universal. The cost of this kit, which provides basic items to a household, including foodgrains, pulses, spices, etc. for a month, has been around Rs. 900 (during lockdown), Rs. 700
(post-lockdown), Rs. 350 (in October-November) and Rs. 450 (in December).
Cost of Replicating Kerala
How much will it cost the Centre to replicate an effort like Kerala’s at the national level for all NFSA beneficiaries?
As for the total number of ration cards and number of beneficiaries being covered, various government portals give different numbers. In order to estimate the resource requirement for provision of food kits to all NFSA beneficiaries, we take the figures from the NFSA Dashboard – 22.5 crore ration cards or families and 75.5 crore beneficiaries, as reported on May 15, 2021.
If for the provision of food kits we take a ball park figure of Rs. 700 per kit in a month for one family, the highest price of a food kit paid by the Kerala government after initial lockdown in 2020, it will cost the Central exchequer about Rs. 94.5 thousand crore to provide food kits to 22.5 crore families for six months.
Under the PMGKAY, the Centre is accruing a cost of Rs. 26,000 crore for providing foodgrains (rice and wheat) to 80 crore beneficiaries for two months, which comes to roughly Rs. 24.4 thousand crore, if we take 75.5 crore beneficiaries. For six months, this would cost about Rs. 75,000 crore. If from the cost of providing the food kit we exclude the cost of providing foodgrains, as the government is already providing these under NFSA and PMGKAY, the additional cost of providing the other essential items for six months to all NFSA families across India would come to about Rs. 20,000 crore. This amounts to a meagre 0.09% of GDP of or gross domestic product (2021-22).
Additionally, if the scheme is to be universalised, it implies that it needs to be further extended to about 40 crore people (going by the estimates of Khera and Somanchi (August, 2020) or roughly 12 crore families. If the cost of providing the food kit to 22.5 crore families is Rs. 95,000 crore in six months, for 12 crore families this comes to about Rs. 50,600 crore. This implies that to universalise the food kits, the additional amounts required would be only 0.23% of GDP (2021-22).
During the 1990s, there was a move toward targeted PDS in order to remove those beneficiaries who could afford paying for the entitlement (wrong inclusion). However, gradually it was observed that in the move toward a targeted system, even the needy get excluded (wrong exclusion). Evidence has shown and experts have argued that with a shift from universal to targeted coverage, errors of wrong inclusion decrease while errors of wrong exclusion increas (Swaminathan and Misra, 2021, EPW Vol. 36, No. 26). As M. Swaminathan pointed out, although errors of wrong inclusion result in a financial cost due to inclusion of ineligible beneficiaries, errors of wrong exclusion lead to welfare costs due to inadequacy of food, malnutrition, ill health, etc.
As the above rough estimates show, the cost of universalising the food subsidy would not entail much cost in terms of GDP but a targeted system would lead to errors of exclusion. The targeted number of beneficiaries is already a gross underestimation. Amidst an unprecedented humanitarian crisis, as we are facing today, can India afford such errors?