Food Security Bill: What Will it solve?

PDS and FCI 

  In the decade or so that I spent in the Planning Commission, the Food Ministry, under which the Public Distribution System (PDS) and the Food Corporation of India (FCI) run, was always one among other Advisory responsibilities on Development Policy.  It did not take very long to find out that the fundamental problem with the system was about so called “leakages” abetted by corruption:  One soon learnt that FCI was one of the most inefficient and corrupt organizations in the government. At that time available estimates of leakage plus administrative costs ranged between 40% and 55%. The other problem was of exclusion – some poor people did not have access to a ration card or subsidized food, whence the horrifying reports of starvation in remote and tribal areas of the country.  This led me to propose the introduction of a Food credit/debit card using smart card technology, which could be integrated with the food for work program and also have the inbuilt flexibility to change over to an income transfer system if desired (Planning Commission Working paper 5/2002).[1]  Instead of dealing with the very difficult political and bureaucratic problems that have stymied genuine reform of the food system, the “Food Security Act,” proposes to deal with these problems with, ”A stroke of the pen.” Unfortunately very little will change, besides providing lucrative new opportunities for bureaucratic and political corruption!

Hunger & Malnutrition

What are the real problems that are still awaiting serious government and NGO attention?  In 2004-2005, 2% of households suffered from hunger at some point during the year and about 25% of people were below the poverty line, but as many as  45% of children below the age of 3 (5) years were malnourished.  If we leave philosophy and politics aside, these facts suggest that,

(a) As hunger affects only 8% of the poor, the food security bill and anti-poverty programs are not the best way of reaching the hungry, who are dispersed across the country and in tribal and remote areas.  The hungry have to be individually and geographically identified/ located. Once this is done it would not cost much to eliminate this hunger through direct cash or food transfers, depending on whether there are or are not competitive food markets in the area where they live.  Thus in remote or hilly areas it is probably necessary to supply food.

(b) Malnutrition is a much bigger problem than poverty and the causes are unlikely to be the same, even though there may be some overlap.  Anti-poverty measures/programs are unlikely to solve the malnutrition problem.

Facts and Analysis

Analysis of the state wise 2004-5 NSS and 2005-6 NFHS data led to the conclusion that the most important cause of malnutrition in India was the abysmal state of ‘public health’ in terms of sanitation, pure drinking water and public knowledge about the importance of cleanliness (al la germs in dirty water, dirt and grime) and nutrition (basic food groups etc.).[2]  If this appears surprising, think about the simple act of eating and digesting food and absorbing energy and nutrition from it.  A child or adult who is sick with diahorea or dysentery can eat as much as (s)he wants but will not be able to absorb it effectively.  Recent medical research goes further, to show that even those children who are living in unsanitary conditions, but do not show any symptoms of gastro-intestinal disease, are infected with germs in their intestines that do not allow them to absorb nutrients from the food they eat.

Cross country analysis of malnutrition data confirms the conclusions of the India analysis.[3] The quality of public health, as measured by variables such as access to better sanitation and improved water sources, explains much of the cross-country variations in the prevalence of malnutrition and the high malnutrition in India relative to other countries with similar levels of per capita income and poverty.  Improvements in environmental sanitation are the clearest and most effective policy-program tool for the Central government to reduce if not eliminate the excessively high levels of malnutrition in India.  The cross country compliments the Indian Inter-state study by showing that female primary education, is an important factor in  reducing child malnutrition, by helping spread information and knowledge about personal hygiene, sanitation and nutrition.

Conclusion

     The Food Security Act will have little or no effect on malnutrition, poverty and hunger.   Hunger can be eliminated if and only if the government and/or NGOs identify the 40 lakh affected households and ensure that cash or food reaches the principle female (mother) of the household.  An, “Elimination of Hunger Act”, with severe penalties for officials in whose area a hungry family is found, could do this at a small fraction of the cost.  Child malnutrition can be dramatically reduced, if not eliminated within a decade, through a massive “public health” campaign: This would insure a modern sewerage and sanitation system in every urban, semi-urban and semi-rural area and pure drinking water, septic tanks and lavatories in rural areas.

A version of this note appeared on the Op Ed page of the Times of India, of Feiday 7th June, 2013, under the banner, "What we need is not a Food Security Bill but a Hunger Elimination Act. " http://timesofindia.indiatimes.com/home/opinion/edit-page/What-we-need-is-not-a-food-security-Bill-but-a-hunger-elimination-Act/articleshow/20465002.cms 

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[1] Arvind Virmani and P. V. Rajeev, “Excess Food Stocks, PDS and Procurement Policy,” Planning Commission Working Paper No. 5/2002PC, December 2001. http://www.planningcommission.nic.in/reports/wrkpapers/wp_pds.pdf.

[2]  Arvind Virmani, “The Sudoku of Growth, Poverty and Malnutrition: Lessons For Lagging States,” Working Paper No. 2/2007-PC, Planning Commission, July  2007. http://planningcommission.nic.in/reports/wrkpapers/rpwpf.htm

[3] Virmani, Arvind (2012), “Under Nourishment in Children: Causes of Inter-country variation,”  Working paper number WsWp 4/2012, October 2012. http://sites.google.com/site/drarvindvirmani/working-papers.

The Unique Identification ( UID) Number: A History

Background

India was one of the first countries in the World  to launch a direct attack on Poverty, long before the UN came up with Millennium development goals.  Prime Minister Indira Gandhi launched the “Garibi Hatao” (Remove poverty) program in the mid-sixties. Yet decades later the record remained mixed, while the programs and financial expenditures on “Anti-poverty” or “Poverty Alleviation” programs expanded by leaps and bounds.  Many scholars judged the performance of India very poor in global comparisons.  There seemed to be a disconnect between the intentions and financial allocations and expenditures.

Food Debit Card

Virmani and Rajeev (2002)^[i] while analyzing the Public Distribution System (PDS) came up with a suggestion for increasing the effectiveness of the PDS.  They suggested a (Food) Debit card or Smart Card System as part of a three pronged approach for eliminating leakages and ensuring that every entitled person received her due (type I and type II errors).  The difference between the proposed debit card and the smart card was that the former required connectivity for determining that purchase of subsidized food remained within the entitled food allocation, while the smart card could be charged with food credits periodically (every quarter or every year) and could be debited directly at a counter without referring to a central authorizing data base.  The second prong was a food stamp system in rural areas in which it may take time to cover every one with smart cards and all PDS shops with smart card readers.  This was based on the success of the  Andhra food stamp experiment.  The third prong was to cover remote and hilly areas that even the PDS had not reached and where food markets may be monopolized or non-existent, through food banks.

Smart Card: ID and Multi-Application

Virmani (2005)[ii] argued for the setting up of an “Indian version of an income transfer system using a modern smart card technology that delivers cash and/or subsidies to the poor based on their entitlements as per specified parameters and norms.”  With the multiple subsidies and interventions and “all the current stakeholders, special interest groups and social policies could be accommodated within a single integrated system.”  Virmani (2006)[iii] elaborated that, “The smart card would also constitute a national identity card.  For instance the card could contain information on citizenship and voting eligibility (constituency for voting) as provided and checked by the home ministry and the election commission respectively.  Secrecy and confidentiality clauses would have to be built into the national smart card system by law.  For instance, any person who does not want to avail of any subsidies / entitlements from the government need not provide the information needed for calculating & monitoring the subsidy/entitlement.  They would for instance only provide the information necessary to obtain a passport and voter registration card.  Many agencies of government (e.g. CBEC, CBDT, and Home) have proposed identification cards.  There are significant economies of scale in having one smart card system for all citizens, with different agencies having their own special modules (password protected access to memory segments) within the card for their specialised needs.”

Empowerment: Unique ID Number

        As part of the preparations for the Eleventh Plan, on March 8^th 2006 a Working Group on “Integrated Smart Card System” for the Eleventh Plan was set up under the Chairmanship of the Principle Advisor for Development Policy, Dr. Arvind Virmani.  This Group submitted its report titled, “Entitlement Reform for Empowering the Poor: The integrated Smart Card System” in November 2006. One of the important recommendations of this report, was that the foundation of this system would be the Unique Identification Number (UID): “The concept of a unique national level citizens’ identity number developed from these initiatives as well as aspirations for a Pan-India e-governance system.  This unique ID could form the fulcrum around which all other smart card applications and e-governance initiatives would revolve. This could also form the basis of a public-private-partnership wherein unique ID based data can be outsourced to other users, who would, in turn, build up their smart card based applications.”  “Once it is linked to a national level unique ID, …. makes identification of beneficiaries an easy task, avoiding duplication and reducing all the attendant costs. Multiple applications piggy-backing on the unique ID, both in the government and private activities, can be conceived..”.

The committee had the following to say about the implementation of the UID system:

“The ISCS should be based on the national level unique ID being      launched by the Ministry of Home Affairs, using a unique national ID as the identifier necessary to avoid duplication of benefits and the beneficiaries thereby helping correct targeting and avoiding Type I and Type II errors.”

“A single authority would however be needed to co-ordinate the program, and to standardize and maintain the integrity of the overall system.  In the start up phase the planning commission can play the role of integrator and coordinator.  Once operations are under way, the National Statistical Commission is the best placed to act as co-ordinator and overall owner of the program.  As already indicated, the responsibility for maintainance and updating of the individual modules and sub-module of the ISC system would remain with the individual departments/ministries.”

“A consultant could be hired to work out the operational details of the program for introduction of the ICS system.  A committee of concerned ministries (PC, Nat Stat com, Finance, Food, RD) could be set up to firm up budgetary allocations, draw up implementation plans and oversee the introduction of the system.”

Implementation of UID

Process Committee

          Pursuant to this recommendation, a Process Committee was set up on 3^rd July 2006, through an order of the Department of Information Technology (E governance Division), to suggest “the processes. for updation. modification addition & deletion of data and fields from the core data base to be created under the Unique ID for BPL families Project,” under the Chairmanship of Dr. Arvind Virmani, Principle Advisor, Planning Commission.  This committee worked out the details of the UID number system and the nature and broad structure of the UID authority that could be set up to manage the system.  It appointed a consultant to operationalize the system. The consultant prepared a detailed “Project Report for setting up the UID Authority,”  It also examined various existing data basis of different agencies and concluded that the only usable data base and the only one immediately usable for this purpose, was the voter registration digital data base of the Election Commission.  The consultant then carried out a pilot project in one urban and one rural area to test how easily and quickly, UID numbers could be issued to all adults in the pilot project area, based on the Election Commission’s data base of registered voters.  The pilot project concluded that about 80% coverage could be attained in a fairly short time, based solely on the Election Commission’s electronic records.  Based on the inputs received, the Process Committee recommended the setting up of a UID authority to carry out the process of issuing Unique ID, along with specific recommendations on these issues (August 2006).

Essential Features

   One of the important mandates of the process committee was to design a practical structure that would have the acceptance of all interest groups represented by the various departments of the government.  Further the design was also motivated by the necessity of ensuring that the UID have the widest possible public support.  It was therefore carefully designed to be as simple and non-controversial as possible while fulfilling the basic objective of "Unique Identification (UId)." This required that only the barest minimum of information essential for ensuring uniqueness would be collected on a compulsory basis from all residents, so as to minimize public concerns about privacy. We determined that this included the place and date of birth, the name of the natural mother and father and signature and/or thumbprint of the UID holder. Though it was accepted that an additional technological identifier like eye scan may be needed to weed out duplicate IDs, 80% of the adult population could be effectively and efficiently covered within two years on the basis of the digital data base of the Election Commission (which has a legal standing).  This was based on an experiment covering both urban and rural areas, carried out for us by a consultant engaged by the Committee.  
    The controversial issue of citizenship was also separated from the ID, by saying that an empty digit could be provided in the UID number format in which a 1 could be entered if the holder of the UID was a citizen and zero if she was not. In principle this allowed, other variation such as a '2' for a non-resident Indian (NRI) with an Indian passport and a '3' for an Overseas Citizen of India (OCI) with a foreign passport.
   The issue of linking social welfare benefits to UID was addressed through the proposal for a application smart card which could have different modules related to different benefits (e.g. food, education, health) and populated by different departments (e.g. PDS, State education department, primary-secondary health centers).  It was envisaged that this information would continue to be based on/related to the information currently on the records of the concerned departments, submitted on voluntary basis by those desiring to receive these benefits. The information entered on each module would also be controlled and managed separately by each concerned department, minimizing the probability of misuse of a comprehensive data base.
     Similarly we envisioned private use of the UID as follows: The UID authority would set up a commercial window, which it would receive and process requests for authentication ( that the UID number matched the basic individual details), for a fee.  The basic UID data base would remain under the complete control and security of the UID, which would ensure its integrity and confidentiality.

 Cabinet Approval

The Department of Information Technology thereafter submitted a proposal for the setting up of the UID authority. An Empowered Group of Ministers ( EOGM) was set up in December 2006, to resolve the issue of the overlap of the National Population Register, under the Registrar General, Home Ministry and the UID under a New UID authority overseen by the Planning Commission.  The EOGM finally resolved the issue in November 2008.   In the end the original recommendations of the Working Group on MASC largely prevailed and the UID Authority was constituted and notified by the Planning Commission in January 2009.  Shri Nandan Nilikani was selected as the first Chairman of the UID authority, and took charge in July 2009. 

Aadhar

      The ‘Unique ID’ was subsequently christened as ‘Aadhar’by the UID led by Shri Nandan Nilinkani. It evolved into a comprehensive technology driven identity platform that became conceptually and practically much more closely linked to social welfare transfers and subsidies, including to Cash transfers and benefits through bank accounts.  
   This extension of the basic UID beyond that proposed by the UID working group and the Process Committee has created new issues.  One is the broadening of the range of information compulsorily required from all citizens/residents leading concerns about privacy and misuse of such information.  These concerns have been accentuated by the fact that the task of giving UID numbers has been sub-contracted to private agents, who it is feared may keep copies of this information for private use. If the recommended UID arrangement had been followed, the additional information would only need to be supplied to the department for which it is relevant and who would have the responsibility for keeping it confidential:  It would not have been accessible in integrated form by anyone (thus minimizing privacy concerns).

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[i] Virmani, Arvind and  P. V. Rajeev, “Excess Food Stocks, PDS and Procurement Policy,” Planning Commission Working Paper No. 5/2002PC, December 2001.

http://www.planningcommission.nic.in/reports/wrkpapers/wp_pds.pdf.

[ii] Virmani, Arvind, “Policy Regimes, Growth and Poverty in India: Lessons of Government Failure and Entrepreneurial Success!”, Working Paper No. 170, ICRIER, October 2005. http://www.icrier.org/page.asp?MenuID=24&SubCatId=175&SubSubCatId=233 .

[iii] “Virmani, Arvind, “Poverty And Hunger In India: What is needed To Eliminate Them,” Working Paper No. 1/2006-PC, Planning Commission, February 2006. http://planningcommission.nic.in/reports/wrkpapers/rpwpf.htm.