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Friday, December 30, 2011

Pushing Reforms on the Back of Hunger -BRINDA KARAT

THE Food Security Bill 2011, introduced in parliament and sent for the consideration of the standing committee, will provide legal sanction to the very policies which have led to the present situation of widespread hunger and malnutrition. Some of the issues in the bill are (1) Narrow targeting, categorisation and definitions (2) Conditional entitlements (3) Extreme centralisation and violation of states rights’ (4) Expenditures and cost sharing.


While experience has shown that targeting policies for food security are counter-productive, the present bill adds new categories of targeting. Indeed the bill is a classic example of the absurd levels to which policies of targeting can reach and the extent of social cruelty embedded in a targeted framework.

So far there have been three categories for targeting for food access in the PDS, namely the APL, BPL and Antodaya. The last category was carved out from the BPL population with an added price advantage of 35 kg of rice at two rupees a kilo. The present bill eliminates the Antodaya category. Henceforth all the 2.5 crore Antodaya families will come under the BPL category and will have to pay one rupee a kilo more for rice which has been pegged in the new bill at three rupees. Thus for these 2.5 crore families the present version of food security means an added cost of 35 rupees a kilo per month.


The bill has the following categories:
(1) BPL: The first category is the BPL category renamed as the “priority sections.” These sections are eligible for 7 kg of foodgrains per person (it is not clear whether a child is considered a person under this definition), if it is rice it will cost three rupees a kilo and wheat at two rupees a kilo, millets or coarse grains at one rupee a kilo.

The number of BPL households at the national level is declared in the law to constitute 46 per cent of the population in rural India and 28 per cent in urban India with state-wise variations which will be decided by the centre. Since several states are giving rice at two rupees a kilo today, BPL sections in those states will also be paying one rupee a kilo more for rice.
(2) APL: The second category is the APL category renamed the “general sections.” The Bill declares these sections to constitute 29 per cent in rural areas and 22 per cent in urban areas. This is less than the number of APL cardholders today. Therefore a substantial section of APL cardholders will be excluded by law. Those who manage to retain their APL cards will get only 3 kg of foodgrains per person. Assuming a family of five members, the bill provides a maximum of only 15 kg of foodgrains which is less than what the APL sections are getting now. The price will be 50 per cent of what the minimum support price (MSP) is at any given time. Since MSP increases every year because of the increase in the prices of farm inputs, APL sections will lose the advantage of the fixed price they have today and will have to contend with an increased price every year. Therefore, in terms of numbers, price benefit and amount of grain, APL sections stand to lose their present entitlements. There is another highly objectionable new provision, which will be dealt with later in this analysis — namely, even the reduced entitlements of the APL sections are linked to the implementation of reforms.
(3) Excluded Sections: There is a third category which has been introduced, for the first time, in the public distribution system. The Bill mandates the exclusion of 25 per cent of the population of rural India and fifty per cent of the population of urban India from the benefits of the bill. The guidelines for exclusion are to be decided by the central government from time to time. This is a new contribution of the UPA government to the concept of food security — legally sanctioned automatic exclusion.
(4) BPL Census Automatic Exclusions Category: However, there is yet another exclusion, the fourth exclusion, which may occur. The questionnaire of the BPL census has already defined the categories of those sections which would lead to an automatic exclusion. The questions themselves are highly problematic. But assume that the numbers reached through this exercise do not add up to 50 per cent of the population in urban areas or even 25 per cent in rural areas, which is what is required in the Food Security Act. Then what will occur is a fourth exclusion category to make up the gap between the two, the arbitrary exclusion percentage requirement of the Bill on the one hand, and the actual numbers identified through the BPL census on the other.
Apart from the ethical issues arising out of arbitrary exclusions from what should be recognised as the universal right of food security, even from a purely economic and administrative point of view, the multiple levels of categorisations will lead to added expenditures, guaranteed leakages and increased corruption.


The definitions section in the bill further expose the folly of targeting . In the section on “special groups” there are provisions for further affirmative action for some sections. But how are these defined? Persons living in starvation are to get two free meals a day once they are so identified by the state government. Starvation has been defined in Chapter 1 Clause 2 (24) as "prolonged involuntary deprivation of food that threatens the very survival of the person.” But who will decide when survival is threatened? At present, even after a person has died due to starvation, official medical teams prompted by governments declare the person had died due to some other ailment. There is rarely an acknowledgement of a starvation death. Then again, what will happen to the semi-starving? Will they have to wait till they come into the category of starvation to get the benefit? Another example is that of “destitution.” In the bill in Ch III Clause 8 (a) a destitute person “shall be entitled to at least one meal every day” — so there is a differentiation being made in the benefits for those in starvation and those in destitution. While the former is entitled to two free meals, the latter gets only one. This absurdity is taken further in the definition of a destitute person. In Ch 1, Clause 2 (3) destitute persons are those who "have no resources, means and support required for food and nutrition enabling their survival, to the extent that makes them vulnerable to live or die of starvation." Can any sane person find any difference between a person in starvation whose life is threatened by food deprivation and a destitute who is vulnerable to death by starvation? But World Bank trained or indoctrinated economists can find the subtle differences between equally hungry people to decide who will get two free meals and who will get only one. These abhorrent differentiations between equally poor and deprived sections are fundamental to the ideology of neo-liberalism and targeting. The logical corollary of targeting --- we can now have inspectors to confirm how often people eat, whether they are destitute or starving or whether they are cheating the treasury by eating two free meals when they deserve only one.

In the 1930s when the capitalist crisis had created "the Great Depression," free soup kitchens were run in the United States. But at that time no one needed a card to prove that they were hungry, it was assumed that only those in need would stand in the queue for free food. Even that sensitivity gets eliminated in the present dominant philosophy of neo-liberalism where targeting and cuts in subsidies in welfare schemes has become the mantra of governments.
In a country with the highest malnourished population in the world, free meals to a small number are an inadequate response. What is required to prevent starvation and hunger is universal access to cheap foodgrains and a basket of essential commodities. The Food Security Bill, however, does the opposite.


The Food Security Bill has an additional provision which was not there in the earlier drafts. Even the reduced entitlements for APL sections have been made conditional to the reform process. Ch II Clause 3(3) states, "Provided that the entitlements of those belonging to the general households shall be linked to such reforms in the public distribution system and from such date as may be prescribed by the central government." In a new chapter VII entitled ‘Reforms in the Public Distribution System,’ the central government details eight reforms of which the most toxic are the "introduction of schemes such as cash transfer, food coupons or other schemes for targeted beneficiaries in lieu of foodgrains;" and "use of aadhar for unique identification with biometric information for proper targeting." Thus contentious policy measures which are against the interests of the people are sought to be legalised on the back of the Food Security Bill. This is a highly objectionable strategy which amounts to using the Food Security Bill to blackmail states to accept the so-called reforms or else be held responsible and guilty of depriving the APL households of their entitlements.


In any case, how has the government arrived at the percentages of BPL and APL that it wants included as the law? Contrary to media hype, there is no change in government policy regarding estimations of poverty, nor is there any delinking between the Planning Commission’s bogus estimates and poverty “quotas” given to the states as promised by the prime minister in response to the public outrage against the government affidavit in the Supreme Court case. Chapter V1 Clause 15(1) states, “The central government may from time to time prescribe the guidelines for identification for priority households, general households and exclusion criteria for the purposes of entitlements under this Act and notify such guidelines in the official gazette.” The next provision 15 (2) gives responsibility to the state governments to identify these sections “in accordance with the guidelines” but here again the central linkage is made “provided that no household falling under the exclusion criteria to be prescribed by the central government, shall be included either in the priority households or general households.” Further, in Clause 17, in case the state government wants to update the lists it has no right to do so and such updating can only be done “in a manner prescribed by the central government.”
Thus the present highly objectionable method used by government to distribute poverty quotas to the states is sanctioned by the law itself. The notorious 26 rupees a day destitution line used for calculating BPL in rural India and 32 rupees for urban India remains as the anchor for the various categories, with the government arbitrarily increasing it by a certain percentage as a "compromise."


If the government has learnt any lessons from it's attempts to steamroller the rights of states in the Lokpal Bill, then it should revise the even more blatant encroachments it has made in the food security bill. Under the Food Security Bill the central government has appropriated all rights in deciding a slew of issues in violation of the federal structure. In as many as 20 clauses the words "… may be prescribed by the central government have been used." Everything, from deciding poverty quotas, to the amount of food security allowance, to the qualifications of even the district level griveance officer working under the state government, to when and how wheat flour can be given instead of grain, all is to be decided by the central government. The centralised thrust of the bill is illustrated well in Ch XV titled Miscellaneous in Clause 46 which states." The central government may from time to time give such directions as it may consider necessary, to the state governments for the effective implementation of the provisions of the Act and the state governments will comply with such directions.".....Such is the commitment of this government to push through reforms that it does not maintain even the pretence of consultations with the states, many of whom are running much better food security programmes than those envisaged in this Act.


Equally objectionable, as far as rights of states are concerned, the bill has no provision for consultation with the states as far as cost sharing is concerned. The expenditures for the states are going to be quite substantial. But even as far as foodgrains supplies are concerned, while the state governments are mandated by the bill to pay the food allowance the bill includes a provision in Ch X clause 31 which allows the centre to substitute food grains supplies with payment to the states. This means that the state would have the responsibility to purchase the foodgrains but there is no guarantee in the bill that the central government would meet the full cost. The states are mandated to fulfil all the schemes including the supply of free meals or rations to special groups. However, the centre according the Clause 30(4) in Ch X will charge the states prices equivalent to the price given for BPL grain. In both these provisions the state governments are expected to subsidise the central scheme from their funds.

As a postscript, the bill has a special "gift" tucked away in the last section under Clause 52. This provision states that if there is a natural calamity which leads to failure of supply of foodgrains then neither the central government nor the state government, as the case may be, can be held liable. The list of conditions where there is no liability includes floods and drought. Since large parts of India are perennially affected by conditions of floods or drought or sometimes both in different regions of the same state, the law to ensure food security will be suspended precisely at the time when people will need it the most, when blackmarketeers and profiteers are out to make profits from the vulnerability of the affected population. The government has no liability in these conditions, and in the non-secular language of the bill, any other "acts of God."

The Congress spin masters have propagated the bill as the "pet bill" of the UPA chairperson Mrs Sonia Gandhi. If indeed it is so, it only shows that contrary to media creations, the UPA chairperson is very much in sync with the neo-liberal framework of the Manmohan Singh government, which is why such a deeply flawed bill should be flaunted with her stamp of approval. The bill in its present form is unacceptable. Concrete amendments should be moved before the standing committee and a widespread campaign launched to explain to the people the fraud being perpetrated on them in the name of food security.

Tuesday, December 27, 2011

Legitimising an inhumane discourse - Prabhat Patnaik

The argument advanced by the Central government in favour of FDI in multi-brand retail is reminiscent of the way the colonial regime justified the destruction of craft production through imports from the metropolis.

The UPA government mercifully has decided to keep in abeyance its decision to allow 51 per cent foreign equity in multi-brand retail. What is disturbing however is the argument with which it sought to justify its earlier decision, which represents a shift towards a palpably inhumane discourse in matters of economic policy. One must protest against this shift before it becomes “acceptable.”

The official argument stated that FDI in multi-brand retail would benefit “consumers” (whoever they are), and peasants and small producers from whom the retail MNCs would procure supplies. Let us for a moment accept these arguments, notwithstanding their vacuity (exposed by C.P. Chandrasekhar in The Hindu, Nov. 30). Nobody however has claimed that the induction of retail MNCs will not harm the small retailers. Even the government's own argument that confining retail MNCs to cities with more than ten lakh people will limit the damage to petty retailers, actually concedes that such damage will occur. There is, of course, an element of dishonesty involved in this argument: since it is not worth MNCs' while to set up shops in villages, what is claimed as a restriction upon them conforms precisely to what they want anyway; but the argument itself vindicates the critics. And since the bulk of employment in petty retail at present is in urban areas, the fact that FDI in retail will cause substantial damage to the livelihoods of vast numbers of people is indubitable. Promoting it therefore is based on the presumption that distress for them should be acceptable because of the benefits that would accrue to other sections of society.

This argument however is dangerously violative of a humane discourse. It is analogous to saying that since the processing of minerals will bring benefits, by way of availability of manufactured goods, to some sections of society, the distress caused to the tribal population which has to be uprooted for obtaining the minerals should be of no concern. And it is exactly identical to the argument put forward in the colonial context that since imported manufactured goods were of superior quality and benefited the consumers (who would not have bought them otherwise), among whom were numerous peasants, the fact that they destroyed the livelihoods of millions of artisans and weavers, should not be held against the policy that freely allowed such imports. In fact the argument for FDI in retail is a precise recreation of the discourse of colonialism.

It is instructive here to recollect the rhetorical question that Gandhiji had asked: If “my brother” the weaver is out of work because of imported cloth, then how can I be better off by it? The humaneness of this discourse was the foundation upon which our anti-colonial struggle was built, and we came into being as a nation. The current official discourse constitutes a rejection of it.

Interestingly, the current official position is antithetical not only to the humane discourse that Gandhiji was propounding, which postulated that no section of the population should consider itself better off by some policy if certain other sections belonging to the non-affluent were pushed into greater distress by it, but also to what even conventional economic theorising suggests.

Vilfredo Pareto, the Italian philosopher-economist, had suggested a criterion for comparing alternative states of society, which has acquired wide currency in economics. According to it, between social states A and B, if there are some persons who are better off, and nobody is worse off, in A compared to B, then A is socially preferable. On the other hand, if some persons are worse off in A compared to B while others are better off then we cannot say that A is to be preferred to B. Taking A to be the social state where MNCs are operating in retail, it clearly follows that we cannot consider their operation to be socially preferable to a state where they are not operating.

The Pareto criterion has major lacunae, the most obvious being that it flies in the face of egalitarianism. If the poor continue to remain as poor in A as they were in B but the rich become much richer, then A is socially preferable to B according to Pareto despite the increased inequality. Not many would accept this view: egalitarianism may override Pareto, but not the converse. But in the case under discussion, if we introduce egalitarian considerations in addition to Pareto, then the argument against MNCs in retail gets further strengthened. Not only will their operation, no matter whether it benefits some sections of society, hurt others, but those hurt will include a substantial number of the poor. Both Pareto and egalitarianism therefore point in the same direction, namely, jettisoning the move to introduce FDI in retail. What is intriguing is that a government headed by an economist should have ignored this basic bread-and-butter economics.

Even if we keep egalitarianism aside, just to pass the Pareto test, the least that the proposed policy should have provided for is a system of compensations, effected through the government budget, for those who stand to lose by it, to be paid for by those who stand to gain from it. But then it may be asked: who exactly stands to gain from it? The government's answer to this question is palpably absurd. The insertion of some gigantic MNCs which would act as oligopsonists vis-à-vis the sellers of produce, consisting of a set of peasants and petty producers, and as oligopolists vis-à-vis the buyers, consisting again of a set of relatively small consumers, is bound to act to the detriment of both these sets. International experience, contrary to the claims of the Central government, testifies to this. But let us for the moment accept for argument's sake the possibility that a large number of people may gain from this move. Of one thing however we can be absolutely certain, namely that the MNCs will gain from it. It stands to reason therefore that the MNCs should be asked to pay for compensating the petty retailers who will lose from their entry, and that they in turn can recoup this by charging whoever gains from their entry. (And if this makes transactions with them unattractive for buyers or sellers, then so much the better, for it will then serve to prevent the supplanting of petty retailers).

For the introduction of FDI in retail to be at all a credible measure for consideration, it is essential therefore that it should be accompanied by a system of compensations for the losers, for example in the form of an Income Guarantee Scheme for the petty retailers. Even with such a system of compensations, FDI in retail can still be objected to on grounds of violating egalitarianism; but without such a system it is simply not worth considering at all. And if such a system of compensations is considered infeasible on administrative or any other grounds, then too it follows that FDI in retail is not worth considering at all.

The process of destruction of petty business by capitalist enterprises was referred to by Marx as “primitive accumulation of capital.” While Marx had seen primitive accumulation as occurring at the beginning of capitalism, it obviously characterises the entire history of capitalism which is marked by violence and predatoriness. But unleashing a process of primitive accumulation of capital, such as what FDI in retail amounts to, is not only violative of humaneness, but also undermines both democracy and the foundations of our nationhood. Having a system of compensations, say in the form of an Income Guarantee for petty retailers, is one way of preventing primitive accumulation of capital. It still does not make FDI in retail acceptable; but it makes it minimally worthy of being placed on the table for discussion.

What is frightening about the current situation is the way measures which are not even minimally worthy of discussion and which entail primitive accumulation of capital, are being imposed upon society through executive fiat. And, to justify this, as many have pointed out, one section of the poor is being spuriously projected as constituting gainers, so that the distress caused to another section can be conveniently overlooked.

(Prabhat Patnaik held the Sukhamoy Chakravarty Chair at the Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi.)

The Hindu

Hazare asks supporters to be ready for final battle

Anna Hazare on Tuesday faced a low turnout as he launched his three-day fast against a “weak” Lokpal Bill asking people to be ready for an ‘aar paar ki ladai’ (fight to finish) to stamp out corruption and ensure that “goondas” do not enter Parliament.

The 74-year-old Mr. Hazare, who sought to sidestep the appeal of his close aides to stop fast due to his health condition, said people will one day teach the government a lesson for the “betrayal” on the Lokpal issue.

In contrast to the impressive gathering at his three protests in Delhi earlier, the numbers were not up to expectations at the MMRDA ground.

Mr. Hazare repeated his threat to undertake a tour of five-poll bound states, including Uttar Pradesh, and said he will campaign against the government and do the same when General Elections are announced.

“Humko thay karna hain, aar yaa paar? (We have to decide, this side or that side). Whatever we should do, we should do.

We should be ready to go to jail,” Mr. Hazare told his supporters after starting his fast at 12:30 pm.

Mr. Hazare, who is suffering from a viral infection, reached the venue after a two-and-a-half-hour long drive from the guest house where he was staying. In between, he also paid respects to Mahatma Gandhi at Juhu Beach.

“Elections have been announced in five states. You and me have to decide whether this betrayal should continue. I will campaign against the government in the five states,” he said.

Emphasising that Parliament should retain its dignity, he claimed that 150 MPs in the House were criminals and if there is a Right to Reject provision, they will not get entry into the “sacred temple of democracy”.

“Today, goondas and criminals are entering politics...if we have Right to Reject, goondas will not enter this sacred temple (Parliament and Assemblies). We have to ensure that our lawmaking bodies remain sacred,” he said.

The commencement of Mr. Hazare’s fast came as Lok Sabha began a debate on Lokpal bill with government side and opposition sparring over the issue.

Mr. Hazare’s drive to the protest venue was marked by high drama when around 20 men blocked his convoy and showed him black flags saying that he cannot take the country to ransom.

The convoy of Mr. Hazare, on way to Mahatma Gandhi’s statue on Juhu beach, was briefly stopped by the protesters shouting “Anna Hazare murdabad“.

Terming his campaign as the second freedom struggle, Mr. Hazare said the fight for a strong Lokpal will not end today and one has to fight a long battle.

“You will not get the Lokpal Bill. You need to be ready for a long battle. The elections are coming in five states.

After two and half years, the general elections will come. I will campaign against the government and tell people how they cheated us,” he said.

Defending his tactics, he said one has to close the nose to make somebody open his mouth.

Hazare alleged that some people were threatening them not to go to the poll-bound states. However, he did not name them.

“We will go there. Many people are threatening us that they will do this, they will do that. What will they do?” he said.

Demanding more powers to gram sabhas, Hazare accused the government of forcefully acquiring farmers’ land and resorting to lathicharge and opening fire when there is resistance.

“Farmers’ land is being acquired without their permission. You don’t have powers to acquire land using force. Without gram sabha’s permission, you should not acquire land,” he said.

Hazare said after ensuring the setting up of a strong Lokpal, the next fight will be for Right to Reject provision.

Crediting himself, Arvind Kejriwal and Kiran Bedi for the fight for RTI, he said because of this law, Suresh Kalmadi and A Raja, who are accused of corruption, are in jail.

In Delhi, the protest by Hazare’s supporters did not elicit much response due to winter chill as well as the activist’s absence. He was earlier scheduled to sit on fast at Ramlila Maidan but changed the venue due to weather condition.

The protest relay fast in Delhi was scheduled to start at 10 AM but it started only 90 minutes later as the crowd was not as huge as witnessed during the earlier agitation when Hazare was at the centre stage.

The leader of the protest in Delhi Shanti Bhushan himself came to the podium at 10:30 AM though another Team Anna member and his son Prashant Bhushan was at the venue before explaining to media persons about the protest and the delayed start.

Prashant blamed the chilly and foggy weather for the low turnout in the morning. “I am sure people will come here as well. It is a cold day, foggy day today. It will take sometime for people to turn up. They will come, don’t worry,” he said.

Activist Gopal Rai said winter and probably the absence of Hazare may be the reason for the low turnout.

Prashant said the Bill in its present form is unacceptable. Protest will continue as well as jail bharo agitation, he added.

Team Anna has made it clear that their four key demands which included provision for an independent investigating agency for the anti-corruption ombudsman were “non-negotiable”.