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Change the PDS, don’t save it

A new food security law, with as-yet unknown details, is supposed to empower the poor with a right to food. Supposedly, this will provide a statutory basis for a framework that assures food security for all: families below the poverty line (BPL) will be entitled to 25 kg of rice or wheat monthl ....Read more

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response to MILIND MURGUKAR article dated 17-06-2009 on food securityBy: rajiv sharma | Thursday , 18 Jun '09 13:29:57 PM Reply | Forward why can't the govt. pay markit price of wheat/rice minus 3ruppees in cash in place of food grain to BPL families.payments can be directly credited to bank account of the concerned in order to root out any malpractice. this will not only check leakages/corruption but also stop fall of price levelof wheat and rice. moreover,more liquidity with the BPL families may create demand for other articles and check recession or create employment.

Response to RohitBy: Milind Murugkar | Wednesday , 17 Jun '09 18:30:15 PM Reply | Forward Rohit,if we try to keep food prices low, then the rural economy in general is adversely affected.Majority of the poor in India are directly or indirectly dependednt on agriculture. Suppressing the food prices hurts them. So the government should protect the poor consumers by providing them effective food subsidy cover and then allow the farmers to benefit from rising food prices.Milind

Subsidy = more avenues for cheatersBy: Rohit | Wednesday , 17 Jun '09 12:41:05 PM Reply | Forward The author is right in saying that this scheme will hurt more than heal. Better would be to have a price differential that's too small for racketeers or no subsidy at all (sell rice/wheat to all irrespective of rich/poor at a single low price - there won't be any hoarding by the rich or by shopkeepers who simply won't be able to sell it at a different price). However given our country's history the govt. has always created a rich-poor divide by way of subsidies. It basically asks the poor to remain poor by making things cheap, opens avenues for black marketing, and fundametally gets it wrong every time - it attacks the symptom rather than the cause. What's wrong with having flat food prices so cheap that even the poor can afford it? Will the rich eat more? No - in fact this will result in every one getting food and reduction in black marketeering.

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