Food rights campaigner and former NAC member Jean Dreze has written to the Prime Minister suggesting that the proposed Food Bill should incorporate strong safeguards if the government intends to go for cash transfers instead of providing subsidised foodgrains.
“We urge you to ensure that the National Food Security Act includes the strongest possible safeguards against a hasty transition from food entitlements to cash transfers,” he said in a recent letter to Prime Minister Manmohan Singh.
The draft National Food Security Bill, which is likely to be introduced in the winter session of the Parliament, provides the option of cash transfer or food coupons, among others, as alternatives to a direct foodgrain entitlement.
Sharing the findings of the recent survey conducted by his team on the Public Distribution System (PDS) in nine States, Prof. Dreze said States where PDS is effective are opposing the idea of cash transfer.
“The reluctance (for cash transfer) was particularly strong in areas with a well-functioning PDS and among poor households... it is only in areas the PDS was not working, notably Bihar and parts of Uttar Pradesh, that we found substantial interest in cash transfers as a possible alternative,” he said.
Prof. Dreze, who has recently quit the Sonia Gandhi-headed National Advisory Council (NAC) following differences over the draft Food Bill, said the reasons that PDS beneficiaries cited for opposing cash transfers were quite thoughtful and convincing.
“In most cases, the reasons pertained in one way or another to food security — an overwhelming concern for poor households,” he said.
For instance, many respondents were worried that money might be misused and also feared about a sudden rise in local food prices. “Even where markets are accessible, there were apprehensions, such as a fear that traders might raise prices if PDS is closed. Similarly, the local bank was often said to be too far, overcrowded or difficult to handle,” Prof. Dreze added.
The Belgium-born professor of economics at Allahabad University also stated, “Many respondents had a bitter experience of the banking system in the context of NREGA (National Rural Employment Guarantee Act) wage payments.”
The survey was conducted in 106 villages spread over nine states: Andhra Pradesh, Bihar, Chhattisgarh, Himachal Pradesh, Jharkhand, Orissa, Rajasthan, Tamil Nadu and Uttar Pradesh.
The draft bill seeks to provide a legal entitlement to subsidised foodgrains to 75 per cent of the country’s rural population and 50 per cent of urban India.