The Central government's bid to cut food rations and increase their issue prices will not decrease its overall spending on food subsidy; it will merely provoke a corresponding rise in grain storage costs at the expense of the poor.
THE three "richest" women of Sukhram village, in the Bundelkhand region of Uttar Pradesh sit by themselves in a courtyard on a sunny afternoon. Until recently, Chandavati was too old to work and fed her family of four on Rs.200 a month. Bhagonia's family ate one roti a day. Chunki Devi's husband broke stones by day and battled tuberculosis by night. But one day the pradhan and the gram sachev issued them bright yellow ration cards inscribed "Above Poverty Line (APL)" making them the Dalit basti's richest families.
Far away in Delhi, Union Minister for Food Sharad Pawar explains why he feels that the food subsidy must be trimmed. According to Pawar, statistics released by the Planning Commission illustrate that while the consumption of ration foodgrains has reduced year on year, the subsidy itself has ballooned from Rs.9,200 crores in 1999-2000 to nearly Rs.26,000 crores in 2003-2004. In his defence, the Minister explains that for Below Poverty Line (BPL) families, the prices of essential commodities remain unchanged. The only significant change is a reduction in the ration allowance from 35 kg of foodgrain a family to 30 kg. For APL families, however, the cutback has been more drastic - an increase in issue price of grain and a significant reduction of foodgrain from 35 kg a household to 20 kg. However, Pawar is quick to assure the nation that the APL uptake of foodgrains stands at a measly 20 per cent, and hence subsidy reduction is necessary.
Back in Sukhram basti, the women systematically debunk the Minister's theories. "The Minister must first understand how APL and BPL cards are distributed," they say. "Then he must understand how rations are distributed, and finally he must stand in a queue and try and procure his monthly rations."
The ration card is perhaps the most widely recognised symbol of the Indian government. Issued on a "per household" basis, the card entitles families to a fixed quantity of rice, wheat, sugar and kerosene, and doubles as a proof of identity and residence for all government transactions and in some cases a voter identity card.
"There are four types of ration cards in our village - yellow, white, pink and green," says Santosh, a resident of Purvakhaincha basti in Bundelkhand. The colour coding is because of the introduction of the Targeted Public Distribution System (TPDS) in 1997. The yellow cards are meant for families that are above the poverty line, the white ones for those below the poverty line, the pink ones for severely impoverished families eligible for the Antyodaya Anna Yojana, and the green ones for special category families such as families headed by widows or the physically disabled. Each card comes with a fixed allowance available for a fixed price. The idea of the TPDS is to direct food subsidies to people who really need it; however, its introduction has spelt disaster for villages in Bundelkhand.
The most basic problem with the TPDS is that of exclusion. The segregation of the poor into multicoloured cardholders has put a premium on the yardstick used to measure poverty. Economists such as Utsa Patnaik believe that the poverty line adopted by the government is an insufficient measure as it represents a bare nutritional minimum, divorced from the realities on the ground. Thus, many genuinely poor families in urgent need of rations find themselves categorised as APL.
Another reason for this exclusion is the method of identification. With its emphasis on identification of the poorest of the poor, the TPDS concentrates all power in the hands of the local pradhan and kotwal (ration shop owner) of the area. The pradhan, who is usually a dominant caste member, is charged with identifying the families in the area and categorising them as eligible for yellow, white, pink or green cards. He is also the de facto issuing authority and has complete control over card allotments. Given that State governments usually issue a fixed number of BPL and Antyodaya Anna Yojana cards for a particular period, most of these cards invariably end up in the hands of the wealthiest and most powerful families in the region, while economically and socially weak sections of society are saddled with APL cards. This incorrect identification of the desperately poor as APL is the reason for the minimal uptake of rations by APL cardholders; APL families simply cannot afford to buy food at APL prices.
While the identification process itself means that many genuinely needy families are unable to afford food, the distribution process ensures that even those who are eligible for rations are unable to buy them. "In our village, the ration shop is only open from the 2nd to the 10th of each month," says Rajvanti of Purvakhaincha village. "And the kotwal insists that we lift all our rations at once. Often I can afford to buy only 10 kg of grain, but the kotwal enters the full amount in my ration book." The remainder is usually siphoned off into the black market.
The full quota of rations costs BPL cardholders Rs.205. Given that the average family earns between Rs.300 and Rs.500 a month, most cannot afford to purchase their full quota in a single instalment. They are then forced to buy wheat that costs Rs.5.65 a kg in the ration shop for Rs.10 a kg in the open market, and kerosene that cost Rs.11 a litre in the ration shop for Rs.50 a litre in the open market. These restrictions on shop timings and purchase in instalments have meant that families in the region operate on brutally tight budgets. It is not uncommon for families to sleep hungry during the last week of a month, or to ignore an illness until the monthly ration quotas have been purchased.
The TPDS is also prey to routine corruption. "New regulations" among ration shops in the Chitrakoot region mean that APL cardholders are only entitled to kerosene and sugar, and are ineligible for foodgrain rations. Rations are often not weighed correctly; villagers seeking rations are turned back on the pretext of insufficient supplies, and significant amounts of foodgrains and kerosene find their way to the black market. The situation in Bundelkhand has reached a stage where entire villages have not received rations for months at a stretch. The ration cards in Sukhram village are shiny, well-preserved pamphlets, unsoiled by use. Page after page lies blank and the villagers struggle to eat one square meal a day.
The experience of Bundelkhand offers an interesting counterpoint to Sharad Pawar and the Planning Commission's bold assertions that ration uptake has fallen owing to a change in dietary habits.
While the Union government has stated that the food subsidy has reached unmanageable proportions, it failed to mention that reducing food subsidy by increasing issue prices actually leads to a net increase in food subsidy.
Utsa Patnaik, author of The Republic of Hunger, points out that increasing issue prices means that large sections of the population are priced out of the market and hence are unable to buy rations. This results in a massive build-up of food stocks, which have to be transported and stored in costly warehouses. A perusal of the food subsidy figures over the last five years shows that while the proportion spent on subsidising consumers has actually decreased, the costs of grain storage have sky-rocketed. That is, it is cheaper to feed people than to store the grain.
Patnaik's arguments are bolstered by a report on long-term grain policy, commissioned by the Ministry of Consumer Affairs and Public Distribution in 2001-02. According to the report, Rs.13,915 crores, or 66.5 per cent of the total subsidy of Rs.20,943 crores allocated by the Central government, was spent on maintaining the country's buffer stocks. In contrast, only Rs.7,028 crores, or 35.5 per cent, was actually spent on subsidising the consumer. In fact, the report states that the absolute consumer subsidy in 2001-02 was actually lower than the consumer subsidy in 1998-99. What this proves is that as millions sleep hungry, the government is spending less on people, while simultaneously spending more and more on storage. The same report also states that the introduction of TPDS has meant that uptake of rations by both APL and BPL families has dropped drastically. The only States where the subsidy has not dropped are Kerala and Tamil Nadu where the governments have offered their own subsidies to APL families to offset the subsidy reduction by the Centre.
Intense pressure by almost all parties across the political spectrum forced the Food Minister to hold off the reduction. However, the Minister has made clear that a subsidy reduction is inevitable. In the meantime, the three "richest women" in Sukhram continue their daily struggles with the pradhan and the kotwal, labouring under the burden of their supposed wealth.
