The National Food Security Act 2013 (NFSA) is a continuation, one might even say culmination, of India's history of a rights-based approached to food. Post-independence and taking lessons from the Bengal famine of 1943, India declared the right to healthy and nutritious meals for all its citizens.

However, this article asks the vital question that the government seems to have skipped over—does the NFSA serve the need that it was intended for?

A brief history from independence to NFSA, 2013

The Public Distribution System that has enlarged into the NFSA was originally launched as a universal food provision mechanism soon after Independence and was only reinitiated as a targeted scheme in 1997 due to complaints about bias against rural populations.

India’s work towards providing food security for its citizens started with the successful adoption of the green revolution, followed by India’s entry into the world economic system as a consequence of liberalisation. Concerned by the macro economic impacts of India’s agricultural protectionist policies on distorting the prices of food grains worldwide, the developed world has been constantly pressuring India to get rid of protectionism that supports the farming class through mechanisms like minimum support prices for crops and stockpiling for supplying for the Public Distribution System (PDS). The journey from Independence until the NFSA 2013 has been a long and bumpy one. The NFSA in its present form includes, along with the Public Distribution System (PDS), the Midday Meal Scheme (MMS), Integrated Child Development Services (ICDS) scheme and maternity entitlements.

From a domestic perspective, the PDS intervention was intended to tackle the issues of food insecurity and providing nutritional entitlements to its most vulnerable poor populace. Most Indians are well-aware of how the PDS works, and most will also suspect that the effectiveness is not as high as could be hoped. Before moving on to a short description of the leakages in the PDS and what level of leakages could be acceptable, it must also be noted that other countries with similar problems have chosen different methods to attack the problem of food security. While it is an undeniable fact that all people should be guaranteed the right to food, many countries have instead chosen food stamps or conditional/unconditional cash transfers to satisfy this need as compared to PDS. The question then is not the intention, but the effect. This article discusses the lacunas in adopting the ‘targeted approach’ to PDS and analyses whether this intervention has been able to solve the problem of food insecurity in India.

NFSA 2013 in brief

Some important features of the NFSA 2013:

  • Two-thirds of India’s population is to be covered by the Act, with up to 75% of the rural population and 50% of the urban population covered.  
  • State coverage overall was to be decided by the (now-dissolved) Planning Commission, whereas the States themselves would decide on which households were eligible. 
  • Pregnant women and lactating mothers, and children in the age group of 6 months to 14 years are entitled to food as prescribed under the MMS and ICDS along with a cash entitlement for the women. 
  • The cost of the NFSA 2013 implementation is to be borne mutually by the States and Central governments.
Is It worth the money: The many problems of the PDS 

In July 2017, the Supreme Court observed that several States had not yet even set up working food commissions, thus leaving the NFSA, 2013 in a state of disarray even four years after the Act was passed.

Apart from teething problems, the NFSA 2013 has certain fundamental problems in approach that need to be addressed, including the expense and mishaps in identifying the target population. A 2011 poverty headcount at USD 1.90 a day (the international poverty line) puts the below-poverty-line population of India at roughly 21% or one-fifth of the population (around 249 million). 830 million is two-thirds of the population, which is the target population to be covered by the NFSA. The difference in targeting is about 600 million people, which is a considerable amount of money that is being directed towards people who are not below-poverty-line, without explanation. In 2017-18, over Rs 1,50,000 crore, or 7.6% of the government’s total expenditure was set aside for the PDS.

If we assume that the poverty line cannot capture measures of food insecurity, (such as not having reliable access to a market, or having money seasonally rather than throughout the year) then it seems reasonable to remove targeting. As many studies have shown, there are schemes where it is cheaper for the government to provide subsidies universally, rather than pay to find out details of the targeted population, which will change annually. As can be seen from the Supreme Court statement mentioned above, targeting can be a significant barrier to provision of necessary subsidies. Additionally it is well-known that the Targeted PDS has always had large exclusion and inclusion errors, including those who are not the target population and excluding usually the most marginalised.

Additionally, most national health surveys have found that the PDS does not show any substantial effect in reducing malnutrition. The fundamental need for the PDS was in order to ensure sufficient and nutritious food to the population, which is not being served. This is an expensive and long-recurring error.

Surjit Bhalla’s analysis of the PDS 2012-13 in his essay, ‘Dismantling the Welfare State,’ deserves a mention. He estimated that less than 10% of the food that the government procures reaches the poor population. He calculated that an expenditure of Rs. 80,000 crore on stockpiling ended up with only Rs. 8,000 crore (one-tenth) reaching the poor. The rest of the food disappeared somewhere in the middle. In the same essay he estimated that Rs. 42,000 crore would bring the entire BPL population in 2011-12 above the Tendulkar poverty line of Rs. 27 and Rs. 33 in rural and urban areas, respectively. This was assuming perfect targeting, which is impossible. Nevertheless, the stark difference of almost half the cost (80,000 crore vs. 42,000 crore) is clear.

Similarly, National Sample Survey based estimations for diversion of PDS food is alarmingly high. This is food that is procured by the government to be stockpiled for PDS purposes but never reached the population it was intended for. The estimated diversion ratio was around 54% in 2004-05, the last year for which detailed data is available from the NSS. That means that over half of the food procured by the government did not reach the target population. The rate ranged from 7% in Tamil Nadu to between 85 and 95 per cent in Bihar, Jharkhand, Assam, and Rajasthan. The southern states tended to do better on average. Calculated rates for 2009-10 seem to be around 41% which is an improvement but hardly enough to merit floating the National Food Security Act

In practical terms then, expanding the PDS was clearly an expensively bad idea.

What about the Right to Choice? Advocating for cash transfers

The more fundamental problem with the NFSA is the insidious extension of a paternalistic approach to the Right to Food. Cash transfers as used in many other countries have repeatedly been shown to serve the purpose of increasing nutrition as well as contributing frequently to more stable situations, including the recent successful LEAP program in Ghana which is a Lower Middle Income Country like India. Conditional or otherwise cash transfers have repeatedly been shown to be of great use. Moreover, the PDS patronisingly assumes the responsibility for deciding the food consumption habits of people, by offering a particular basket that people must buy. This has even had the effect of changing food habits from millets to rice leading to a worse diet for people in tribal areas.

It must be noted that this article has examined the PDS, and not ICDS or MMS. It should be expected that those schemes will find similar diversions of food and other similar irregularities. Unfortunately, the schemes must also be seen as separate from the PDS for the simple reason that the household may be an easy method of accounting but it is well-known that power struggles in the household often relegate women and children (particularly girl children) to lower status. Cash transfers are, for instance, best done through bank account transfers but the account is likely to be controlled by the man of the family, and this may leave other members vulnerable.

The fact is that any single solution to poverty reduction and malnutrition cannot be a cure-all and that we must also grit our teeth and accepts some amount of error in every solution. However, it is appallingly careless to carry on funding a project that is not only leaking money, but also not serving the purpose it is meant to in any form.

Cash transfer to targeted populations is one tested solution that would reduce the burden on taxpayer money and show results. Moreover, cash transfers give the freedom to people to decide on their own food habits, allow them to accumulate savings for distress periods, and have the additional effect of minimising losses in transfer as bank account transfers are more easily tracked and less easily diverted compared to the current system.

It is time to cut our losses regarding the NFSA and look forward to a solution that actually is a solution.

(This article has been written by Mohini Ganguly who is working as a Research Associate in CUTS International, under Centre for International Trade, Economics & Environment. She holds a Masters in Climate Change and Sustainability Studies from Tata Institute of Social Sciences (TISS), Mumbai)