A Critique of the Shanta Kumar Committee Report
Deepankar Basu and Debarshi Das, Guest Bloggers
Deepankar Basu is assistant professor in the Department of Economics, University of Massachusetts Amherst, U.S., and Debarshi Das is associate professor in the Department of Humanities & Social Sciences, Indian Institute of Technology, Guwahati. A shorter version of this article was carried in The Hindu on Tuesday, February 17, 2015.
Within months of assuming office, the BJP-led National Democratic Alliance government set up a High Level Committee (HLC) in August 2014 to restructure, re-orient and reform the Food Corporation of India (FCI). The eight-member HLC was chaired by senior BJP leader, Shanta Kumar, and included prominent economist Ashok Gulati. On January 22, 2015, the HLC submitted its report to the government and made its recommendations public.
In the short run, the committee recommends that the National Food Security Act (NFSA) 2013 be curtailed. The NFSA entails providing subsidized food to about 67% of the population; the committee recommends that the coverage be brought down to 40%. In the medium run, the committee recommends that the current public distribution system (PDS) be replaced by a cash transfer system. This will mean that the State will no longer have to be responsible for distributing food to vulnerable sections of the population. Hence, the State will no longer need to procure food from farmers, and store it. Since the current system of procurement, storage and transportation is primarily managed by the FCI, the medium-term vision of the HLC implies that the FCI can, in due course, be folded up.
While there are other important details whose implications need to be studied seriously (e.g., encouragement of contract labour), it seems safe to suggest that the overall thrust of the HLC’s recommendations, if implemented, would whittle down operation of the FCI in the short run and completely dismantle it in the medium run. The HLC has advanced two broad set of arguments as justifications for its recommendations. Critical scrutiny shows that both these sets of arguments are fallacious.
Read the rest of this entry »