Should Indians be listening to outsiders’ opinions on our policies when their expertise pertains to things other than India?
In the last two weeks, we have had two economists – Amartya Sen and Joseph Stiglitz of Columbia University – holding forth on the Food Security Bill, when neither of them seems to know how things really work here.
Sen, speaking to The Economic Times, said the food security law must be implemented despite its flaws (italics mine). “I think government shouldn’t shy away from helping people in the bottom of the layer, which can make a dent on India’s unenviable reputation as being the country with the highest number of under-nourished children.”
Stiglitz, speaking to CNBC TV-18, said that the right to food is bang on. “The most important asset that any country has are its people….these are not only basic human rights, but also good investment strategies for the long-run. So while some of the benefits won’t be felt rightaway, I think over the long-run the benefits will be realised.”
Why do we treat Sen’s words like pearls of wisdom when we don’t want to trust our own economists back home? Eric Feferberg/AFP
Two things need to be clarified rightaway. No one – including those opposing the Food Security Bill – is proposing that we should not treat hunger on a war-footing. Moreover, the affordability (budget constraints) argument is only an additional point and not the core of the objection to the Food Bill.
So, let’s hear Sen again on the Food Bill. Sen is known for his work on famines and how democracies prevent acute starvation. He is no expert on the innards of the Food Bill, or the corruption that comes with pumping so much food through a decrepit public distribution system (PDS).
Sen told The Economic Times: “…the attack and scepticism has come from those saying this adds another Rs 27,000 crore and isn’t it fiscally irresponsible? But I don’t think it is. Because there are so many ways we are losing revenue. The foregone customs duty in imported gold and diamonds would have generated Rs 50,000 crore. I’m very keen on fiscal responsibility but I’m not keen on the idea that you don’t question things such as subsidy on diesel for rich people or fertiliser subsidy. Whenever something is thought of to help poor, hungry people, some bring out the fiscal hat and say, ‘My God, this is irresponsible.’”
Well, Sen is talking the language of politicians here. This is exactly the argument the Congress will use in the next elections. “We want to feed the poor, but we faced criticism from those who don’t want to do anything for the poor.”
However, who is opposing the reduction of subsidies for the rich? It’s the same people who are legislating the Food Bill. Why isn’t the Manmohan Singh government not reining in gold imports? Why are diesel cars not being taxed more? Who is holding up reforms in fertiliser subsidies? Why is petrol price still regulated after deregulation? The answer lies with the UPA government, its allies and Sonia Gandhi.
As for diamond imports, Sen should know that most imports pertain to roughs. We export more diamonds than we import. Roughs are polished and re-exported. Without this value addition, our current account deficit would be even higher and the rupee would crash further.
Nobody would oppose the Food Bill – even in its expensive form — if it was to be funded by cuts in other subsidies. But Sonia and Rahul Gandhi’s politics won’t allow that. Sen is off the mark on this.
Sen has also bought the government’s figure of Rs 27,000 crore of extra subsidies on the Food Bill. Ashok Gulati of the Commission on Agricultural Costs and Prices – who is clearly better informed than Sen on the grain markets in India – has put annual costs of the Bill at Rs 2,00,000 crore – which means an additional Rs 1,25,000-1,40,000 crore of extra spending over the current food subsidy bill.
Do we want to believe an expert like Sen who paradrops himself into the country for receiving assorted honours and ignore the real experts who know what the current reality is?
Why do we treat Sen’s words like pearls of wisdom when we don’t want to trust our own economists back home?
Sen clearly does not know what he is talking about. Nor is he willing to note that the Food Security Bill is not a new idea at all. Does he know that we have attempted food security through many, many schemes for decades? We have had food-for-work, we have had the anganwadi schemes for mothers and children, and we have the mid-day meal scheme, which is now universal. We also have the Antyodaya scheme introduced by the BJP in some states. We also have NREGA to provide incomes.
The concept of giving foodgrain at Re 1 or Rs 2 was started in Andhra Pradesh in the 1980s by NT Rama Rao. A similar pricing scheme exists in Chhattisgarh and some other states.
So food security is not a new discovery of Sonia Gandhi’s National Advisory Council or Amartya Sen.
The need of the hour is to fix all existing schemes so that they deliver food security to the poor, and not to launch one more scheme which will cost so much and still not deliver.
Surjit Bhalla of Oxus Investments, estimates the losses due to corruption in the public distribution at over Rs 28,000 crore annually. Since the food subsidy scheme will go through the same channels, Firstpost extrapolates the potential for annual corruption under the Food Security Bill at over Rs 50,000 crore.
In the name of the poor, Sen is actually suggesting that we condone all this.
And now to Stiglitz.
A BusinessLine report had Stiglitz waxing eloquent on the Food Bill. “India is on the verge of a historic implementation of the world’s largest social protection programme against hunger, just as the rural employment scheme was the largest social protection programme against unemployment,” he said at a convocation address at Indian Statistical Institute in Kolkata.
Just note the words “historic” and “largest” in the world.
We Indians are suckers for praise like this. When someone calls us the “world’s largest democracy” we swoon in delight. When someone writes about India and China in the same breath, we get delirious. In fact, we fall for this precisely because an NRI like Sen or a foreigner like Stiglitz is saying them.
The Food Bill may be the world’s largest social protection programme, but it will also be the world’s largest invitation to corruption and crooks. But we don’t want to fix that.
Our media goes around asking every passing foreigner what he thinks about India when he may know nothing about India or its economy.
We have clearly not gotten out of the colonial mentality where anyone pronouncing judgment on India from the outside is considered a greater expert than someone from within.
