Given the scale of deprivation, hunger and malnutrition at present, it was expected that budget 2012-13 would accord top priority, in terms of allocating adequate resources under food subsidy, to address these concerns. But unfortunately, like business as usual, the Union Budget outlay increased marginally towards food security, which is way below the level of expectation.
Let’s look at the budgetary trend towards major subsidies as well as under food subsidy in the Union Budget since 2004-05. Although, there has been a significant improvement in allocation, in its absolute number, towards overall subsidy as well as under food subsidy in the current budget compared to the budgetary allocation made in 2004-05, their shares from total expenditure as well as from country’s GDP seem government’s unwillingness to secure food for all. Hence, this calls for immediate action in the form of increased public expenditure on the head food subsidy in order to achieve food security. Before getting into the details of the budgetary provisions for food subsidy, it is crucial to look at the trends of major subsidies provided in the Union Budget.
Total subsidies as a proportion to Gross Domestic Product (GDP) was 2.32 % in 2008-09 which declined to less than 2 % in 2012-13 budget estimate (BE). Similarly, the allocation under food subsidy in 2012-13 Budget does not show any such significant hike so as to ensure food for all even this budget indicates that the proposed National Food Security Bill (NFSB) is not going to be implemented from the next fiscal. Though there has been an increase in allocation under food subsidy, in absolute terms, in the current budget compared to the previous year’s revised estimates (RE) i.e. 2011-12, food subsidy as a proportion of GDP and the total Union Budget has either declined or stagnated since 2009-10. Food subsidy as a proportion to GDP and total budget hovers around less than 1 % and 5 % respectively in 2012-13 budget estimate. Further, the share of food subsidy as a proportion to the GDP has been less than 1 % since 2004-05; its share has further declined in the current budget compared to the allocations made in 2009-10
Such low allocations towards food subsidy in the current budget (2012-13 BE) points to the government’s apathy towards implementing the proposed NFSB. It is important to highlight here is that under the proposed NFSB, the amount earmarked for food subsidy was Rs 79 800 crore, however, the present budgetary allocation is Rs 75, 000 crore, which means union government is not serious to implement the proposed NFSB. In other words, this is indicative of the government’s lack of commitment to provide food security to all, particularly the poorer sections of society.
With the present budgetary allocation towards food subsidy being abysmally low, the need of the hour is to revert to the Universal PDS (UPDS) in terms of distributing rice and/or wheat and millets. As per our estimate an additional Rs 1, 10,418 crore is required over and above the existing food subsidy bill of the Union government to universalise the distribution of rice and/or wheat and millets, with the set of assumptions mentioned above.
(The author is a research officer at Centre for Budget Governance & Accountability (CBGA), a budget think tank)