*****************************************************Shame Shame CON-gress Six Myths about the Food Security Bill Presented by CON-gress . . . ***************************************************** ===>> A REALITY CHECK ON FSB : Overall, the FSB will be a bad implementation of a shaky idea. A better solution would be to dismantle the food subsidy entirely and pay people directly. The cost of wheat or rice in the market today is about Rs 30 per kg for PDS-provided rice. Buying five kg costs Rs 150. A direct transfer of Rs 150 into the accounts of the very same 67 percent of population will cost about Rs 1.2 lakh crore (for 70 crore people), without any of the cost of all the warehousing, the procurement, the rotting and the wastage. We could dump all the stored wheat and rice in the market over time and prices would be contained. And direct transfers would be easily traceable, so leakages would be lower.>>>>> ***************************************************** NOW . . . . . Here is the lowdown on how the food security bill will actually pan out for all of us. A reality check on how to think through the costs of the largest ever subsidy in the history of India and how it will affect us today and tomorrow. =============================================== >>1. The Food Security Bill (FSB) costs 1 percent or 3 percent of India’s GDP, so it is expensive or inexpensive.>2. The FSB will not affect the larger economy – or us – that much.>3. The FSB will cover 67 percent of the population.>4. All we have to do is plug the leakages.>5. Warehousing reforms can fix the rot.>6. We could easily afford the FSB if we just paid more taxes.>Overall, the FSB will be a bad implementation of a shaky idea. A better solution would be to dismantle the food subsidy entirely and pay people directly. The cost of wheat or rice in the market today is about Rs 30 per kg for PDS-provided rice. Buying five kg costs Rs 150. A direct transfer of Rs 150 into the accounts of the very same 67 percent of population will cost about Rs 1.2 lakh crore (for 70 crore people), without any of the cost of all the warehousing, the procurement, the rotting and the wastage. We could dump all the stored wheat and rice in the market over time and prices would be contained. And direct transfers would be easily traceable, so leakages would be lower. **********************************************************************************************************
Posted on: Thu, 29 Aug 2013 16:04:46 +0000
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