Food Insecurity

ONE MORE REPORT ON MALNUTRITION has been released to confirm what we already knew. Going by the recent survey conducted for the Citizens’ Alliance Against Malnutrition, which was released by the prime minister on 10 January, 42 percent of Indian children are malnourished, half of them severely. We were again reminded—this time by Manmohan Singh and the dozens of news headlines that carried his remarks—of what he called our “national shame”.

But what is this shame? It’s not about our having so much malnutrition. It is about why we didn’t reduce India’s malnutrition levels, despite our claim to be the second-fastest growing country in the world. Our high growth rate—of more than eight percent, give or take—does not seem to have made a dent in the number of our malnutritioned. That is the national shame.

Why did India’s handsome GDP growth rate fail to improve its social indicators? The answer is: Partly because it was accompanied by increasing inequalities. Consumption inequality in India, as measured by the Gini coefficient, increased secularly from 0.30 in 1993-94 to 0.36 in 2009-10 because we failed to include the majority of our citizens in the growth process. The employment created between 2004-05 and 2009-10, for example, was a mere one million, as against the projected estimate of 60 million. Creating employment is the surest way of ensuring inclusive growth: not only does it increase output, but employment that is gainful also serves a redistributive purpose.

Much of the growth accrues to owners of capital as profits, rather than as wages to workers. The ratio of profit to value-addition in the manufacturing sector increased from less than 20 percent, on average, in the 1980s to 60 percent by the end of the last decade. At the same time, the share of workers’ wages fell from almost 30 percent in the 1980s to 10 percent by the end of the previous decade.

But the problem was also that the government failed to use its increasing revenues from high growth on public social expenditure. Compared to the 20 percent of the GDP that is spent, on average, on public social expenditure by the OECD countries, India’s outgo, at less than five percent, is at the very bottom of the table. For the record, countries which grew at a slower pace than India spent more—such as Brazil (15 percent) and South Africa (eight percent).

On the other hand, there are countries, including our poorer South Asian neighbours, who can hold their heads high because even with their slower growth, they have delivered the goods by reducing malnutrition. At the beginning of this decade, India was doing better than every South Asian nation except Sri Lanka. Today, we are the second worst, after Pakistan. Even poorer countries, with barely a third of our per-capita income and polities far more disturbed than ours, have done better in spending on the social sector and in improving their social indicators. What is worse, India is one of the three unfortunate countries in which the International Food Policy Research Institute’s Global Hunger Index has gone up—from 22.9 to 23.7—between 1996 and 2011.

Our growth failed to deliver because the nature of the growth process was exclusionary; more importantly, we failed to use our high growth to improve our spending on social programmes.

While the answer to this complex problem is largely political, the political economy of growth is only one part of the problem. Another part is that, in addition to the vast numbers involved, malnutrition remains an invisible phenomenon—not in the sense that the affected 42 percent of children cannot be seen, but in the sense that malnutrition is not seen as a problem. Children might not die directly of malnutrition; but they probably will die many deaths from the ill-health that malnutrition imposes, which is eventually reflected in poor productivity and the inability to earn a livelihood—even, in extreme cases, huge out-of-pocket expenditures on the amelioration of frequent spells of ill-health.

Malnourished children are invisible in India’s political discourse. We do not treat malnutrition as a crisis; and our government does not respond to anything unless and until it becomes a crisis—for which government then supplies quick-fix solutions. But it is unlikely that a quick-fix is possible for an issue so deep and pervasive—the problem of malnutrition requires a multidimensional approach that includes interventions in terms of educating families, in general, and mothers, in particular; better sanitation facilities and safe drinking water; cheap food, perhaps subsidised for those who cannot afford it—above all, a unified strategy to deal with all these.

Our political priorities, thus, are all wrong, being heavily biased against expenditures on the poor. This is evident even in the words we use: any design to spend on food security is treated as a ‘subsidy’, which is considered, for all practical purposes, both a drain on the public exchequer and unproductive. On the other hand, tax benefits to the middle class and the private sector, which are comparable in size to ‘subsidies’, are treated as growth-enhancing stimuli.

Consider this: by some readings of budget documents, the corporate sector receives tax breaks worth R5 trillion every year. This, of course, does not include the various bailouts and subsidised credit facilities that are routinely extended in the name of ‘fiscal incentives’. In response to the financial crisis of 2008, the government had announced two fiscal stimulus packages: one worth R310 billion (on 7 December 2008), followed immediately by another worth R400 billion (on 2 January 2009). While both were announced a mere three months after the financial crisis broke in the US, it has taken more than three decades for our government to even acknowledge the presence of malnutrition. And that, simply, is because we don’t think that spending on food security is going to enhance growth.

Not only is this a fallacy, but it is also an unsustainable fallacy. Recent evidence shows, convincingly, that the money spent on food security not only has a great impact on poverty and malnutrition, but also that, by enabling more people to meaningfully contribute, it enhances growth. The states which saw the highest poverty reduction in 2004-10 were Chhattisgarh, Orissa, Tamil Nadu and Andhra Pradesh—incidentally, states with efficient food public distribution system (PDS). On the other hand, states such as Bihar, that had high growth in the same period, also saw poverty levels remain unchanged because they refused to invest in food security. The best of our states have expanded their coverage of PDS beneficiaries, streamlined the functioning of the PDS using modern technology—and, topping it all, invested their own resources in it. The simple message that came from these diverse states was: high coverage, low prices.

Unfortunately, the Central government has not taken cognisance of this message, as is evident from the current draft of the National Food Security Bill before Parliament. The Bill proposes provision of seven kg of rice, or wheat, or coarse cereals per month at R3, R2, or R1 per kg, respectively, to ‘priority’ households—a definition that includes 46 percent of the rural population and 28 percent of the urban. But the Bill also excludes 25 percent of people in the rural areas and 50 percent in the urban areas from any food subsidy. The remaining households, called ‘general’ households, have been promised three kg of grain a month at half the government’s procurement cost—but this is conditional, with no guarantees written in.

In its effort to restrict food subsidies, the Bill has resorted to ‘targeting’, implicit in which is the assumption that only the poor are malnourished. What this approach is in denial of is that not only have such attempts to ‘locate’ the poor not been successful, but also that ‘targeting’ has damaged the existing structures of food security by creating a highly inefficient system. The government’s own national sample surveys show that, one, leakages increased after targeting was first introduced; and, two, that the most efficient states—those with the lowest leakages—had not employed the targeting methodology. So, sadly, this Bill adds nothing to the existing PDS system; if anything, it curtails the abilities of the states to expand their existing systems, if they want to.

Incredibly, though, there have been attempts to vilify even the minimal, basic proposals of the Bill. None of these proposals will cost additional money, but there is nevertheless scaremongering that food security is the last nail in the coffin for plans to rein in the fiscal deficit. By the government’s own admission—submitted to Parliament as part of the financial memorandum attached to the Bill—the total cost of the PDS would be R800 billion. In nominal terms, it would entail an additional R130 billion; in real terms, the increase would be a mere five percent. And even these figures represent the presumptive outer limit, arrived at by assuming that every eligible household will take the PDS grain due to it. In reality, cent percent offtake has never happened: only 40 percent of eligible households take their share of PDS rations. Even assuming an 80 percent offtake, the food subsidies requirement would, in fact, be lower than the existing subsidies.

Not just that: the maximum grain requirement of 61.7 million metric tonnes is less than this year’s actual procurement of 62 million MT. The average yearly procurement over the past four years was 58 million MT. There is no storage problem, either, with our current storage capacity being 63 million MT.

Furthermore, as far as specific expenditures on child nutrition—such as the Integrated Child Development Scheme and the Mid-Day Meal Scheme—are concerned, they are already mandated by the Supreme Court and should not be seen as ‘additional’ expenditure.

Ultimately, therefore, the fight against malnutrition and hunger is hampered not by lack of finances, foodgrains or storage but by lack of political will. The enemy in this battle is the mindset that considers human development as undeserving of public spending.