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Revising National Food Security Act 2013 proposal by NITI Aayog – How NFSA prices are revised?

Revising National Food Security Act 2013 proposal by NITI Aayog – How NFSA prices are revised?

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  • GS3 || Economy || Agriculture || Food security

Why in the news?

The government think tank NITI Aayog has recently recommended to review the flagship programme National Food Security Act 2013.

Food security in India:

  • According to the Food and Agricultural Organisation (FAO), food security is when all people at all times have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life.
  • Food security can be understood to have three important dimensions
  1. Availability of food: The availability of enough food in quantity as well as quality.
  2. Access to food: The accessibility of food which also includes supply-chain, enough provisions etc.
  3. Absorption of food: The ability of masses to consume enough food with adequate nutritional status.

Food Security Act, 2013:

  • To ensure food security, the Parliament enacted legislation in 2013 known as the ‘National Food Security Act, 2013’.
  • This Act was also popularly called the Right to Food Act as this Act makes it statutory obligations on the government to provide subsidised food grains to approximately two-thirds of India’s 1.33 billion population.
  • Subsidised food was the main pillar on which the entire framework is based.

Salines provisions of Food Security Act, 2013:

  • Coverage: The Act legally entitled up to 75% of the rural population and 50% of the urban population to receive subsidised food-grains under the Targeted Public Distribution System (TPDS). About two-thirds of the population, therefore, is covered under the Act to receive highly subsidised food-grains.
  • Entitlements: The Act ensures nutritional support to women and children. Pregnant and lactating women would be entitled to nutritious meals, free of charge under the MDM and ICDS schemes.
    • Children in the age group of 6-14 years would also be entitled to free nutritious meals under the MDM and ICDS schemes.
    • Maternity benefit of not less than Rs.6000 is also provided to pregnant women and lactating mothers.The Act also empowers women by identifying the eldest woman of the household as the head of the household to issue ration cards.
    • The Central Government aids the States to meet the expenditure incurred by them on transportation of food-grains within the State and also handles the Fair Price Shop (FPS) dealers’ margins according to the norms.
    • There is a provision of a food security allowance to the beneficiaries in the event of non-supply of food grains.
  • Transparency: Provisions have been made to disclose the records related to the PDS to ensure transparency.

Other Food security Programmes of India:

  • Targeted Public Distribution System (TPDS): A major chunk of Government Expenditure on Food Security is spent on Food Subsidies which are implemented through the Targeted Public Distribution System.
  • Mid Day Meal Scheme (MDM): It is the world’s largest school meal programme aimed to attain the goal of universalisation of primary education. Each child from class 1-8 within the age group of six to fourteen years is eligible for a cooked nutritious meal every day except school holidays
  • Integrated Child Development Services Scheme (ICDS): Integrated Child Development Services (ICDS) scheme is the largest national programme for the promotion of the mother and child health and their development.

Food Subsidy in India:

  • After the implementation of Food Security Act, 2013, the cost of food subsidy has risen steadily at Union and States budgets. However, the subsidised food cannot be done away as it protects the poor from price volatility due to inflation and ensures food security. Over the years, while the spending on food subsidy has increased, the ratio of people below the poverty line has decreased.
  • The Ministry of Consumer Affairs, Food, and Public Distribution is the nodal ministry for the implementation of food subsidy
  • Food subsidy is the largest component of the Department of Food and Public Distribution.
  • Food Subsidy accounts for 95% of the total budget allocated to the Department of Food and Public Distribution. Currently, Food Subsidy covers 81 crore people.
  • For the 2021-22 fiscal year, India’s total outlay toward the food subsidy is expected to cross Rs 2.1 lakh crore.

Problems in Food Security Act, 2013:

  • Lack of Transparency: The NFSA suffers from heavy exclusion-inclusion error according to the CAG report. .
  • Leakages in PDS: a leakage indicates that the food grains do not reach the intended beneficiaries.
  • Storage: The available storage space as well as overall woodgrain management was inadequate for the allocated quantity of food grains.
  • Quality of food grains: The quality of the food grains is not up to the mark and that the grains sometimes have to be mixed with other grains to be edible.
  • Unsustainable cost of food subsidies: Post-implementation of Act, the cost burden of heavily subsidised food grains has risen to an unsustainable level.

Salient recommendations by NITI Aayog:

The continuous criticism of the NFSA, 2013 required the NITI Aayog to review the functioning of law. The Act was reviewed by the NITI Aayog which also included Chief Economic Advisor to the GoI. The NITI Aayog floated a discussion paper with following recommendations:

  • Reduce coverage: The recommendations suggest reducing the coverage to 60% from the current 75% of the rural population, and to 40% from the current 50% of the urban population.
  • Revision of beneficiaries according to the latest demographic data: It has also proposed a revision of beneficiaries as per the latest population which is currently being done through Census- 2011.
  • Revise Central Issued Price (CIP): The NFSA provides a legal right to persons belonging to “eligible households” to receive food-grains at subsidised price– rice at Rs 3/kg, wheat at Rs 2/kg and coarse grain at Rs 1/kg — under the Targeted Public Distribution System (TPDS).
    • These are called central issue prices (CIPs). A revision of CIPs is one of the issues that have been discussed.

Rationale of revision:

  • The provisions in the law itself: Under Schedule-I of the Act, the subsidised prices were fixed for a period of three years from the date of commencement of the Act. While different states began implementing the Act at different dates, the deemed date of its coming into effect is July 5, 2013, and the three-year period was therefore completed on July 5, 2016. However, the government has yet not revised the subsidised prices.
  • Recommendations of other committees: HLC (High Level Committee) under Shanta Kumar had recommended reducing the coverage ratio from 67% of the population to 40%. The Economic Survey- 2020-21 had recommended a revision of the Central Issue Prices (CIP) of food-grains released from the central pool, which have remained unchanged for the past several years.
  • Unsustainable cost of food subsidies: If the beneficiary coverage is left untouched at current 75-50, then the total number of people covered will increase from the existing 81.35 crore to 89.52 crore —an increase of 8.17 crore. It will result in an additional subsidy requirement of Rs 14,800 crore.

Challenges to implement the recommendations:

  • In the times of Covid-19 pandemic, it will be a double burden (Unemployment and Food insecurity issues) on the poor section of the society.
  • To implement the challenges, the Act may need amendment from the Parliament.
  • In order to implement the reforms, the Union has to secure the consent of States.

Model Mains Question:

  1. Critically examine the salient provisions of Food Security Act, 2013. Do you think that the Act needs to be reviewed comprehensively? Give reasons.