NEW DELHI // Even though Rajesh Kumar struggles to feed his six children, he will not take a government handout. His reason is not pride but the quality of the subsidised food available.
“I have to pay more for the market rate of goods because what the government gives us is substandard.”
The Indian cabinet approved a landmark food security bill this week to increase the subsidised food it provides to 64 per cent of India’s 1.3 billion people – a populist but costly programme that critics have said will fail to feed more of the hungry and inflame inflation.
The legislation, which must still be approved by parliament, will increase the food subsidy bill by nearly 280 billion rupees (Dh19.4bn) to 950bn rupees.
Mr Kumar, 39, earns 9,000 rupees (Dh630) a month as a clerk for a contractor. He has a government-issued ration card that allows him to purchase subsidised food including rice and wheat at “fair-price” stores.
But he refuses to shop there because Mr Kumar’s wife, Sunita, complained of finding pebbles and mice faeces in the rice.
“Can I take the risk and feed this to my children and then burden myself with healthcare costs if they get sick?”
While food inflation dropped this week to a four-year low at 4.35 per cent from 6.6 per cent on December 3, the annual rate stands at 18 per cent in 2011, according to the India’s commerce and industry ministry.
The Indian government considers the expansion of the subsidised food as the solution to rising food prices. The subsidies will target 75 per cent of the rural population and up to 50 per cent of those in urban areas. The food minister, KV Thomas, said the bill would be presented in parliament before the end of the week.
“It is an extremely innovative scheme, which is practically efficacious and economically sagacious. It is a milestone. Such a creative initiative has not been thought for decades,” said the Congress party spokesman, Abhishek Singhvi, when the bill was approved on Tuesday.
A Ganesh-Kumar, an economist and food policy analyst with the International Food Policy Research Institute in New Delhi, said the government’s heart was in the right place, but the bill would not get food to those who need it.
“The government’s objective to achieve food security for the poor through this bill is a noble idea and should be supported,” said Mr Ganesh-Kumar. “But the way they want to do it is objectionable.”
The food policy expert said the delivery system was rife with problems and expanding the programme would only compound health risks. Grain storage facilities are outdated, leading to pest infestations. Most of India’s poor do not buy food at fair-price shops because the quality is so poor.
“Many studies, including the government’s own reviews, have shown that it does not perform well,” he said. “Only 10 to 20 per cent of poor people actually depend on it.”
Fair-price shops keep irregular hours, and grain supplies are sporadic.
This is partly the fault of poor logistics, but also a consequence of corruption. Much of the subsidised grain is stolen and sold on the open market, said Mr Ganesh-Kumar, adding that the dramatic increase in subsidies would only boost the black market.
The food policy analyst said that the subsidy plan should be scrapped and the government should look at different programmes such as a cashback plan that would allow the poor to buy from the general market.
He said any attempts to efficiently distribute cheap, quality food in a country as vast as India would fail.
“We have to devise our own models for subsidies distribution,” said Mr Ganesh-Kumar. “What works in Brazil does not work in India, and what works in Tamil Nadu does not work in Gujarat.”
With the Indian economy struggling and the government already operating with a hefty budget deficit, Mr Ganesh-Kumar said the new subsidy programme would place a significant burden on increasingly scarce federal funds.
“A lot of money will have to be spent, especially on ramping up food production to meet the subsidy requirements,” he said. “Two hundred and eighty billion rupees that would have been spent on irrigation or developing degraded land will now be diverted to the food security bill.”
He said the increased demand for staple grains for the programme could increase inflation, the problem the bill was designed to combat. “This is a huge amount of money that is not being spent wisely.”