The ‘Anna Bhagya’ scheme is one of the five main poll promises made by the Congress party ahead of the Karnataka assembly elections in May 2023, promising to provide an additional five kilograms of free rice to each member. Family below poverty line. The (lack of) vision of the Congress party is as dismal as the policy of the central government.
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Even the staunchest critics of the PDS were forced to recognize its important role in keeping people from going hungry during the COVID-19 related lockdown. Many believe that the coverage of 80 crore people (during the pandemic) is not only laudable (it is) but also sufficient (it is not). In addition to inadequate coverage, in most states, the PDS does not provide nutritious food items such as pulses and oil. These are the two shortcomings which must be removed.
In late March 2020, the central government announced that it would double the ration for those who have ration cards. It was a good move for the situation at that time. But even this did nothing for those who did not have ration cards – and there were many of them.
The National Food Security Act (NFSA) 2013 substantially expanded the coverage of the PDS. So, why are so many people still without ration cards? The law states that 50% of the urban and 75% of the rural population should be covered by the PDS. The central government combined these coverage ratios (adjusted to take into account state-wise poverty levels) with 2011 population numbers to determine each state’s ‘quota’ of ration cards. As the NFSA came into force (in a graded manner across states between 2013-2017), PDS coverage increased from 500 million to 800 million – its current level.
The problem is that even in 2023, India continues to use the 2011 census as the central government is evading its obligation to conduct the 2021 census. The NFSA requires that the latest completed census be used to calculate total PDS coverage. Thus, the government has a convenient excuse to ignore demands to expand PDS coverage keeping in view the population growth. At the all-India level, under-coverage resulted in the exclusion of an estimated 113 million people, of whom 1.1 million are in Karnataka.
Some states use their own budgets to “top up” PDS coverage through the Open Market Sale Scheme (OMSS) – for example, Tamil Nadu – or local purchases – for example, Odisha and Chhattisgarh. Interestingly, no state government – even those led by non-Bharatiya Janata Party parties – has raised the issue of under-coverage due to outdated population estimates with the central government.
shut down omss
Food Corporation of India (FCI) procures food grains for three broad purposes. One, it supports producers by procuring (mainly) wheat and rice at the minimum support price (MSP). Two, the central government uses it to meet the needs of the PDS (providing five kilograms per person per month free of cost to NFSA households), a consumer subsidy. Three, the stock is used for price stabilization through OMSS.
OMSS has been in news recently. This is important for states that go beyond NFSA rights. This is especially true for states like Tamil Nadu which rely on OMSS wholesale by FCI to support their unique universal PDS. During COVID-19, many states used OMSS grains to run community kitchens and supply food packets. This is the route the Karnataka government was counting on to deliver on its ‘Anna Bhagya’ promise, which would see rice profits almost double from their current levels. When Karnataka asked for OMSS grain for the ‘Anna Bhagya’ promise, the central government said it would no longer allow states to buy OMSS grain.
The central government has given three reasons for the state governments to discontinue OMSS. One, it claims that OMSS can play its price stabilization role better if food grains are released through the market rather than through states/PDS. This is not a sound argument as the two are more or less equivalent. In fact, there is no guarantee that private traders who get OMSS rice at fixed prices will pass on the benefits to consumers.
Two, the central government has expressed concern over maintaining grain stocks at “comfortable levels”. While it may be true that procurement this year will be less than in previous years, the government has failed to mention that its current stock position is actually very comfortable. For the past five years, when the central government was providing double the ration as relief during the COVID-19 pandemic, the stock buffer stock has doubled from the norms (see chart).
Third, it reportedly states that “state governments are going to give food grains only to those beneficiaries” who are under the NFSA or to beneficiaries of state schemes, and that the central government has an obligation to the 600 million people who fall under its purview. I do not come. PDS.
The central government’s obligation to the 600 million people left out of the PDS is best met in other ways – for example by updating PDS coverage using the population projected for 2023. If the Congress had promised to extend the PDS in Karnataka, it could have avoided the argument put forward by the central government. Stopping the sale of OMSS to states shows that although the central government is not willing to spend on it, it wants to prevent state governments from doing so.
Options before Karnataka government
Congress party’s ‘Anna Bhagya’ promise exposes lack of foresight for food security. Why promise more rice to those who already get five kilograms every month, especially when over one million people in the state, who should have been part of the PDS, have been left out due to old census data. Why not give them the benefit of NFSA instead?
It is also time to think beyond rice and wheat through PDS. When it comes to Karnataka’s neighbors like Tamil Nadu and Andhra Pradesh and elsewhere (in Himachal Pradesh), PDS ration card holders get heavily subsidized pulses and oil through the PDS.
The Karnataka government is well set to expand its PDS to include 1.1 million excluded people and provide them five kilograms of food grains (either rice or millet or a combination of both) per person every month. The purchase of millet is a sensible option to meet the obligations of the expanded PDS, at least temporarily. Millets like ragi are part of the local diet anyway and are equally, if not more, nutritious than rice. Karnataka is a major producer of millets; If the state procures at MSP, it can support its farmers as well as the consumers.
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For existing PDS beneficiaries (who were promised ‘Anna Bhagya’ rice) and new card holders, the state may provide them two kg of pulses and one kg/litre of oil free of cost every month. The cost of expansion and diversification of the PDS to the state would be almost the same as the ‘Anna Bhagya’ promise. More importantly, an expanded and diversified PDS is more valuable from the point of view of social (as opposed to individual) benefits than the cash transfers to existing PDS households that the state is currently considering.
Ritika Khera is Professor of Economics at the Indian Institute of Technology Delhi