Foodo Nomics

While sitting in café in pune I saw two unkempt children peer through the window. They tap at the glass, trying to get the

attention of customers who are sipping the coffee and eating the sandwiches. The children appear thin and small for their ages and it may because of malnourishments and after the ignorance of customer they ran away.

I sure that you also gone through such scenes which now a days are in commonplace, where despite plentiful resources of food, millions of people struggle to get enough nutrition (According to the International Food Policy Research Institute’s Global Hunger Index, India now rates in the top four in the world for undernourished children under the age of 5) and raising inflation has made the situation more difficult for the poor.

On the surface of that recently launched Food Security Bill aims to remove poverty and malnutrition but the as per my opinion, supplying food grain will may eliminate poverty but not the malnutrition as both are having difference.

The widespread concern that the move of FSB will actually hurt India’s economy. Some economist argues that the scheme will weaken India’s investment scenario over coming months as they feel it is political stunt (Vote Bank Scheme). It will also create more burdens to India’s already wide budget deficit. Meanwhile, others doubted how effective the food security scheme will actually be, given corruption and inefficient distribution system. The distribution system in India – whether subsidised food grain or cooked midday meals in school or PHC is very flawed and not benefiting the target group as expected.

The dual pricing of

basic goods on such a large scale will going to lead price distortion in both domestic and international market (concerns being raised by developed countries over the government's food security programme in recent WTO ministerial conference in Bali).

It is widely believed that India needs to achieve growth of 8% to create enough jobs. Last year our economic growth slowed to low of 5%. Foreign investments is going out, RBI is fighting with depreciating rupee & growing inflation, we are struggling to reduce fiscal deficit and CAD and on that govt. FSB is fuelled these concerns. The sign is simple that Politics is winning over economics at this point of time.

Economist and bankers are concern about financial situation of the country. One side of coin is that govt. is proposing cut in subsidies because this would take the burden out of the budget deficit figure and at the same time what same govt. is doing – apart from all the reasons for the food security of the country – there is a cost and cost of this particular FSB is really high. (> 1 lakh crore – Govt. figure & >2 lakh crore – CACP estimate beside infrastructure and other costs)

So the situation today is leading us nowhere and people are getting sceptical on the overall picture of Indian economy after fully implementation of FSB.

I am not against to cater the food to poor at subsidised price but it will successful only when we clearly able to draw a straight line between the warehouse to home of needy one without causing damage to economy.