The top 5 myths about the Food Security Bill

Myth #1: The Food Subsidy Bill is an epochal event - a 'game changer'

• Truth #1: The food subsidy bill is a reformed Public Distribution System (PDS), and some more (lactating and pregnant women, hunger allowance etc). In that sense, it can be called PDS+. The core of the program is the same as the existing PDS - a part of the population is entitled to highly subsidised foodgrains (earlier only wheat and rice; now including millets) which are provided by Fair Price Shops (FPS) across the country.

• Truth #2: The PDS has been in existence, in one form or the other, for the majority of our country's life since independence. We have tried several different versions of the PDS - targeted, universal and then back to targeted. Life's come a full circle, since the food subsidy bill is taking us back to a near-universal coverage.

• Truth #3: The significant departures of the FSB from the PDS are four-fold: (1) inclusion of millets - in my opinion, a long-due and impactful step (2) recognition of PDS food as a right - always existed but good to put it on paper (3) women to be holders of ration cards - was probably true in-practice even earlier, but women's agency within the household is further strengthened (4) equality of prices for rich and poor - this is seen to lead to higher efficiency because of reduced potential of cross-selling.

Myth #2: The Food Subsidy will destroy our fiscal stability

• Truth #1: The food subsidy bill is not astronomically more expensive than the existing PDS. The existing food subsidy bill crossed 1 lakh crore rupees sometime in the early 2010s. The food subsidy bill (which will subsume the existing PDS) is expected to cost somewhere around 1.25 lakh crores. It is a ~25% increase; surely a significant increase, but not one that is going to break India's back.

• Truth #2: The food subsidy burden (PDS + others) has been stable around 0.6-0.8% since when my generation was both. Even a 25% increase in the burden is going to take us to ~1% of GDP. I'm not saying these are small numbers; all I'm saying is that we've been living with these large numbers for a long time and we've both grown, and stagnated, with these numbers. Let's not portray the food subsidy as a cataclysmic event.

• Truth #3: Today I read news reports that India's debt to GDP ratio has gone below 70%. So, we've been reducing our debt/GDP ratio significantly in recent times. Also, debt/GDP ratio in India is lower than in several other major economics; in fact, it is close to the 60% that is required to be a part of the EU. India's fiscal situation is not alarmingly bad.

Myth #3: The bill is throwing money down a dysfunctional drain

• Truth #1: The PDS efficiency is estimated to be around 40% by various agencies. This is extremely poor, but does not compare too badly with existing cash transfers in India. Most Government programs show a similar efficiency level. The argument can then be made that the Government should withdraw from provision. Instead, I make an argument similar to the infant industry argument - live with an inefficient system, improve governance and then reap the benefits later.

• Truth #2: The PDS has worked very well in states such as Tamil Nadu, Himachal Pradesh and Chattisgarh. The efficiency of the PDS in Tamil Nadu (where everyone - poor or rich, is entitled to 20kg) is above 90%. Hence, the PDS is a leaky drain that can be, and has been, fixed.

Myth #4: There is no point giving rice and wheat, instead of more nutritious food

• Truth #1: In any country, cereals are the cheapest sources of calories and proteins. Giving subsidised rice and wheat ensures that a minimum part of a person's daily needs are met.

• Truth #2: Cereals are the least perishable of foods, and hence best suited for long-distance transportation. The food security bill, in fact, is a positive step in that it goes beyond wheat and rice, and includes millets, which are lower than wheat and rice.

• Truth #3: By giving subsidised cereals to people, the Government is saving them a lot of money. This money can then be used by the households to diversify their food basket. Instead, if the Government were to transfer fruits and vegetables, then wastage would be much higher. Hence, the design and intent is to transfer the most efficient food and then let people save up and buy their own stuff.

Myth #5: The Government should restrict itself to creating jobs

• Truth #1: In an ideal situation, this argument works. But India is unable to create jobs for different reasons - primary among them being labour laws. Instead of arguing against food subsidy at this stage, argue for labour and land reforms and then talk about phasing out food subsidy.

• Truth #2: Wages as a percentage of productivity in every sector has declined in the past few years - i.e. lesser and lesser of our growth is being distributed in the population as wages. The growth we've been seeing is increasingly less inclusive. We can't wait till food reaches the poorest guy by trickling down. More active intervention is needed.

• Truth #3: Food is different from other goods and services because it is a fundamental human need. I believe that principally, something as basic as food cannot be left to economic systems, which are falling. Economic systems have shifted from feudalism to capitalism and might shift further. We cannot let the vagaries of our economics affect human lives. Practically, the Government is also the owner of all water in the country - hence, extend the same principle to food and the Government's intervention in food markets is not only justified, but also necessary.

Bhagwati V/s Sen : The Real Deal

Jagdish Bhagwati's attacks on Amartya Sen, Sen's own involvement in political discourse, and their supposed political affinities, have become topics of discussion recently. On one hand, of course, I feel glad that a discussion in this country is happening lead by two of the best intellectuals this country is supposed to have produced. At the same time, the sweeping brushstrokes painting this debate as Sen's Socialism versus Bhagwati's Capitalism, or Sen's Kerala versus Bhagwati's Gujarat, have been rather unfortunate. I have read a bit of what Bhagwati has to say about development themes, and am beginning to understand Sen's views. With that caveat, I would like to try to show that this debate is nowhere as sharp as it is being made to be.

Firstly, does either of the economists disagree that growth must benefit the marginal sections of society? No. Sen's views on this aspect are fairly well known. On the other 'side', Bhagwati repeatedly mentions that growth is a means to achieving human development. Moreover, his passionate defense of India's performance on development indicators betrays the centrality of human development in his world view. That Sen would have a lot of intervention in human development is fairly well known. But Bhagwati has discussed at length various methodologies that can be used to improve the standard of living of the people. Bhagwati at no point defends laissez faire or even the now-ridiculed trickle down theory. Hence, there is a commonality of human development as the 'end' in both their arguments.

So what is different? Given my limited reading of both, I have been able to identify two sources of 'discord'. The first is regarding the prioritisation, and the second regarding the implementation. Let me talk about the former first. Laymen have often rejoiced at the growth versus equity debate - and Sen and Bhagwati are seen to be at opposite sides of the spectrum here. But on closer look, the differences do not seem to be all that significant. Sen has merely said that growth (of the kind that India has experienced since 1991) is a great thing, but the lack of an improvement in human development at the same time is shameful. He seems to argue that growth for the sake of growth is immaterial, which I do not believe any sensible person would debate. At no point have I seen Sen argue that India should have grown at a lower pace, and instead redistributed its national income. On the Bhagwati side, he clearly demarcates 'Track I' and 'Track II' reforms. All of his Track II reforms are directly targeted at human development, and even his 'Track I' reforms around economic liberalisation, are supposed to eventually lead to human development. The minor divergence here is the prioritization. Sen would say that equity and human development will eventually lead to growth, whereas Bhagwati would say that growth will generate the necessary resources for equity and development. Neither of them would disagree, I assume, with the fact that growth and development essentially go hand-in-hand. I do not believe there would be any country which focused on any one while ignoring the other.

The second, and apparently more substantial difference, is their view on Government provision of basic services. Here, Bhagwati is distinctively right-wing. He praises the virtues of the private sector in provisioning (with the Government acting as a facilitator), and also suggests replacing the NREGA with cash transfers. I have not read Sen's views on different Government services yet, but on the food subsidy, for example, he openly confesses his lack of knowledge. His support for the food security bill, if at all, is a grudging realisation of no better alternatives. Sen says we need to intervene more effectively in the poor's lives, and if state intervention is the best way to do it, then so be it. For example, Sen extols the virtues of the Bolsa Familia in Brazil, a cash transfer that would be something even Bhagwati would praise. 

In conclusion, the differences between these two great economists is not as great as it seems to be. Bhagwati is by no means a capitalist, and Sen is even farther from being a socialist. A welfare state within the structure of capitalism is neither unique nor surprising.  We, as readers, can rationalise the debate between two great minds to hone our own understanding of the country we live in.

India's Turn : When?

I remember a chapter in the second year titled 'India's Turn' that presented a rather startling fact - that India's  economic growth had started in the 1980s, well before the reforms initiated in 1990s. The narrative was as follows: Indira Gandhi, chastened by her defeat in 1977, now returned with a more pro-business attitude. This 'attitudinal shift' alone was sufficient to accelerate growth, and was followed by piecemeal reforms in the mid-1980s, following by full-blown reforms in the early 1990s. In this story, the reforms in the 1990s, at best, helped in sustaining the momentum that had already been built.

I have started reading the book 'India's Tryst with Destiny' by Jagdish Bhagwati and Arvind Panagariya. In the book, they state that growth during 1980-1987 was only 4.6% p.a, closer to the 'Hindu rate of growth' of 4% than to the growth rates we are now accustomed to. The 'high' growth rate of the 1980s was seen during the period 1988-1991, well after piecemeal reforms had been initiated and the fiscal deficit had started ballooning.

My problem is that, to make our education more holistic, we should be presented with an academic debate, rather than an academic piece of work. A debate would have enabled us to understand the issue in more depth and then form a perspective on it. At the very least, counter-views should have been suggested for further reading (and not testing). 

Was Gandhi a Marxist?

This article was published in Satya 2013, annual journal of Gandhi Study Circle, St. Stephen's College.

Was Gandhi a Marxist? This question arises from the fact that both Gandhi and Marx had similar views. Gandhi fought against caste, race and various other social sufferings. He fought against economic exploitation and oppression of the poor by the rich. Marx fought against political subjugation and oppressed humanity in his own way. According to him, capitalism, where the workers are exploited is an unstable system and leads to crises.

Their views were similar but not identical. Gandhi’s approach was quite different from that of Marx. Both of them believed that social conflicts existed because of disparities between the rich and the poor. But, they differed on their views on how the conflicts would be resolved. Marx believed in revolutionary means while Gandhi believed in reformist means.

To elaborate further, Marx’s Dialectical Materialism explains his views regarding class struggles. According to Marx, it is the internal contradictions within the system that brings about a change. The people who are being exploited will organize themselves together and revolt. This revolution would abolish the existing class structure. The English Revolution and The French Revolution are the examples of how revolutions took place because of internal contradictions and finally led to the emergence of a capitalist class.

“The history of all hitherto existing society is the history of class struggles.” – Karl Marx

Gandhi, on the other hand, found class struggles to be quite superficial. His approach to resolving conflicts was through non-violence and Satyagraha. However, there is certain inconsistency in what he believed. On one hand he believed in harmonious co-operation between the poor and the rich, labour and capital and landlords and tenants. On the other hand, he also believed in struggling against exploitation.

According to Gandhi, the struggle against exploitation, unlike what Marx believed, will not take place through bloody revolutions, but through non-cooperation. If the workers can come together in the form of trade unions and refuse to co-operate with the capitalists, then they will be able to control the supply of labour. The capitalists will be forced to increase their wages. In Marxian terminology, Reserve Army of Labour is the biggest hindrance to the increase in wages and Gandhi believed that the only way to overcome this was non-cooperation.

"The idea of class war does not appeal to me. In India a class war is not inevitable, but it is avoidable if we have understood the message of nonviolence.” – Gandhi

What makes me believe that Gandhism is irrelevant today is the fact that people have become excessively self-centred and they are involved in an unending pursuit of acquiring more and more at the cost of the others. Gandhi believed in the mutual love between the labour and the capital. He wanted to convert the capitalists – the exploiters, which he thought could be done only through non-violence and Satyagraha. His theory of trusteeship was based on moral transformation of the capitalists, but we know that in today’s world, people do not give away their wealth (acquired through exploitation of labour and the poor) listening to moral preaching.

What Gandhi wanted to achieve was to educate and awaken the masses, make them conscious of their exploitation, bring them together into a powerful organization, so that they can struggle against the exploiters and fight for their rights. Even though Satyagraha and the non-violent ways might be thought of as moral preaching in the 21^st century, but we shouldn’t forget that it was this weapon which in part led to our Independence. Critics argue that Gandhi’s approach was applicable only to a specific historical context. True, but the need is not to side-line his ideas but to study them and revise them according to the changing situations.

Marx and Gandhi had very similar philosophies about what an ideal society should be. Both of them focused on a society free from exploitation. But again, their approaches to the achievement of this ideal state were different. Marx believed in a classless, stateless communist society which is described in the Communist Manifesto. On the other hand Gandhi believed in a non-violent, egalitarian and a democratic society where everyone is treated equally, irrespective of caste, race, and sex and where there is no discrimination based on income because the entire wealth belongs to the society as a whole.

According to Marx, we would reach communism because of the process of Dialectical Materialism. The germs of a future society lie within the present society and these opposites within the system contradict it and lead to revolution. Feudalism gave way to capitalism, because the germs of capitalism (the exploitation of the peasants and serfs by the lords) lay within the system itself. Similarly, capitalism will give rise to socialism and finally communism would emerge. It would be a society of dignity and freedom, a society with human conditions rather than ‘animal’ conditions of existence.

Gandhi asserted that one day moral transformation would take place which would lead to, what he called, Ramrajya. He explained the evolution through non-violence.  Violence and self-centredness are the qualities of a beast. Earlier we were beasts, wandering and hunting animals. Realizing the need to curtail violence, we took to agriculture. Hence Gandhi had faith that this streak of progressing through non-violence would continue till the ideal state is achieved. A man understands co-operation and is morally sound. This is what Gandhi believed we are heading to – from beasts to a man.

In today’s world, Marx seems to be winning the race because we foresee that communism might follow capitalism and socialism. China already claims to be a communist country. But, nowhere is Gandhi’s Ramrajya to be seen. The reason, I believe, Gandhi’s approach is difficult is because it is too ideal, it’s like bringing heaven on earth and converting the devils to angels. Marx’s communism might emerge as a future society because it’s not all that ideal and solves only those problems which can be tackled, given the current stage of human development.

Though both Gandhism and Marxism are similar in spirit, they are very different in practice and it becomes essential to re-read them and make changes to them as the society progresses.

The Unequal Race

Economists, I say, are trained in the art of justifying everything. Perhaps that is what has enabled me thus far to justify inequality. Humankind has developed and flourished due to inheritance; inheritance is the raison d'etre of our race coming to dominate this world. Think of it, a tiger's life is no different from its mother's. A mother tiger teaches the offspring as much as she knew, and then the offspring passes on the same knowledge to its kid. Humans, however, are different in this aspect. Our collective knowledge is stored for eternity, and then added to by every generation. What our ancestors did enables us to do even more. Similarly, what our fathers and grandfathers did enables us to do even better.

For example, I wonder how different my life would have been had my father not decided to join the navy, and instead stayed on in Gorakhpur. There would have been no question of joining DPS, R.K.Puram, and hence no path leading to St. Stephen's. There would have been no exposure to debating and quizzing as much as I got at these two institutions. Probably, there would have been no economics in my life! I am reaping the benefits of a decision my father took. Between me and someone who is still living in a small town, there is not much difference in terms of what we have done. It is the different between what our parents did, their parents did, and so on. The difference between us would be one of inheritance. Perhaps this is what most of us call destiny, or kismat.

I have had the good fortune of being involved in Bandhan microfinance's education program. The more I think of it, the more impressed I am by Bandhan's recognition of the multi-dimensional nature of poverty and inequality. Here's a short film I had made back then (I apologize for the copyright violations, of course): Bandhan's development projects. This would give you a better sense of the inequality I'm talking about.

The fact that I can justify this inequality in educational opportunities doesn't necessarily mean that I support it.  While I have absolutely no moral issues with our educational system being competitive, I have a problem with the competition being unequal. Is the competition between a Delhi-educated student and a small town student, for admission into an IIT or an IIM, a competition between equals? I do not think so. This was, of course, the basic principle behind reservations.

The problems that reservations bring up are by no means small. Firstly, there is the problem of identification - a problem that plagues any social scheme in India. How does one identify people who are deprived of education opportunities? Our policymakers have taken an economic and caste viewpoint to this. While caste-based identification is an abhorrence to me, I am not too comfortable with economic selection too, especially in its implementation. Moreover, isn't inequality a question more of degree than of existence? For example, a person who is poor and rural is at a greater educational inequality than one who is rural but rich*. Thus, any policy that identifies people based on the existence of certain parameters is bound to be flawed. The less be said about people mimicking this parameter, the better.

How then can educational inequality be bridged? At a national level, I do not have anything of import to suggest. However, each one of us can contribute something to the cause. While I am usually skeptical of volunteerism, I cannot help but be impressed by Jalnidh's initiative Eclaire. We need more of this.

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* - this is similar to any economists' arguments against using the head count ratio (HCR) as an indicator of poverty. Head counts tend to mask the degree of inequality within the less privileged section.

Satyamev Jayate

Every Sunday morning, Indian television viewers get to see a social issue being discussed in Satyamev Jayate. I never got a chance to view any episode until today. Everyone is aware of the commendable response that this initiative by Aamir Khan has received throughout the country. It is claimed that the show has left a bigger impact on the society than expected.

So, today I was looking at TRPs of this show. The Television Viewer Rating has plummeted from 3.8 in the first month to 2.9 in the second month. I have always heard people talking optimistically about this show, but the popularity seems to be fading away. Obviously, these ratings are not a true indicator of what the actual situation is.

Though Aamir Khan seems not to be worried about these falling TRPs, his aim has been to improve the viewership. But what I see as a matter of concern is whether the very purpose of the show is fully achieved or not. Today at the end of the show, which focused on caste discrimination, Aamir Khan talked about how those freedom fighters made us free in 1947 because of which we remember them today and similarly, we should also make our society free from the evils of casteism so that the coming generations remember us. What I doubt is that if today’s show was vibrant enough to encourage the present generation to act? It was shown that how people perceived that casteism has almost come to an end at least in urban areas but it exists even today in well reputed universities and practiced by the youth of the country.

Yesterday, I was watching IIFA, which was too uninteresting except a couple of performances by Priyanka Chopra and Bipasha Basu. Not getting into all that, this IIFA was called ‘green’. Before and after every break, tips to conserve electricity and save environment by doing your bit was shown, but I doubt how many of the viewers actually followed it? Or even if they did, will it be sustainable? The problem lies here!

For viewers, Satyamev Jayate might be something worth to watch on a rainy Sunday morning like today, sitting in the drawing room, sipping a cup of coffee. What I think is that human memory is short lived. An hour and a half show on a Sunday is nothing to turn the stone upside down. Ofcourse, it is creating awareness among the masses but I feel there should be follow-ups the entire week after the episode is broadcasted on Sunday, to show more real-life stories, problems, experiences and the ways in which we can fight against them as it is our responsibility as the youth of the country.

I am not denying the fact that in rural areas, thousands of villagers gather in a place and watch the show, which definitely has a positive impact. Ofcourse, the show is doing something noble. Something is better than nothing! It would be wrong for me to say that it’s a half hearted approach, but with little more effort if something substantial can be achieved, it will be in the betterment of our very own society. 

Why perfection is never seen

All of us seek perfection from those around us - our friends, our families, our colleagues and so on. Some of us acknowledge that perfection will not be found, and hence we accept imperfections in those around us. However, our criteria for such forgiveness are often very blurred. There is no consistent framework within while we can put our life experiences.

I will put this article into two sections. The first will deal with the theoretical underpinnings of what I mean to say. The second is the practical application of these theoretical underpinnings. For those of the readers who aren't quite fans of deductive logic, I would suggest that you skip the first section.

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Hence, the sense in which I will be talking about 'perfection' here is not professional perfection, but perfection in our social interactions. Also, the 'framework' that I talk about is deductive logic - the formation of certain exogenously-given premises, and using a small set of fairly axiomatic steps, arriving at a conclusion based on those premises.

Beginning with this framework, the first step is to acknowledge that every human has a different set of premises. While I have said that this is exogenously given, we can qualify it better. I would believe that every human's set of premises is determined by his experiences, and also his reaction to these experiences*. Even if the experiences were the same, the reactions would most probably not. This could happen for several reasons - a person might be constrained in several spaces (especially true of children and women, the elderly, poor individuals, unhealthy people), there might be a 'random' component to any social outcome and that the external environment might not remain constant, such that the outcomes are not the same. While I have used a fair amount of jargon here, the point to be emphasized is simple enough -  no two individuals start with the same set of premises.

Even if we assume that all humans are rational (and I don't see any reason not to) and that they employ the same set of axioms (this is where disagreement is more likely), this will lead to different conclusions. Hence, conflict is inevitable in modern society. Note that we made barely any assumptions here - even the assumption of rationality and uniqueness of axioms is merely intended to show the power of the argument. Relaxing these assumptions will, in fact, further strengthen the argument that I have made. However, I must make a qualification here. Divergence of premises is no reason to assume divergence of conclusions. These conclusions might end of being the same. Here, I diverge from deductive logic in saying that the probability of such an occurrence is low.

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In practice, each one of us falls into several disagreements with our friends and colleagues. Since we do not know what premises/beliefs that lead to a particular action, we take the action itself as a proxy for the belief system. For example, if I convinced my friend to join me for a movie, and then my friend called me up at the last moment to say no, then I do not have perfect information as to what lead my friend to make that particular decision. I would use whatever knowledge I have of the action of his not coming to reach a judgement.

It would seem better that I should rather just acknowledge the lack of information and then move on with life, rather than being miffed with my friend. However, how many of us actually do that? None whatsoever. The reason being that, in practice, perfect information will never be available. Hence, we will never reach a judgement. Even if our friend is actually the bad guy in the picture and keeps repeating his actions, I will never have enough information to indict him, and to take necessary action.

For this reason, such an outcome is never observed. As humans, we all would have certain preferences between certainty and information. The example we have considered in the previous paragraph is one of a person who prefers 100% information. On the other hand, if certainty was the only thing I cared about, then to say that 'life exists on mars' would be the best outcome - since it is 100% sure. However, most of us would be quite uncomfortable with such an assertion. 

We thus choose a point that has both uncertainty and lack of information. This is where our preferences differ. Each one of us would accept different levels of uncertainty (and by corollary, of lack of information) given how much information we have. Hence, this is a matter of preferences.

For this reason, perfection in social relations can never be seen. Even if I personally want to be as rational as possible, I would never be able to be perfectly rational unless I am ready to accept being a weak, indecisive individual who can be taken for a ride by virtually anybody. All of us wouldn't, and this is why perfection is never an outcome in social relations. We all forgive some, and don't forgive some. How much we forgive is given by our own preferences. Our acquaintances will never agree to how much we forgive, because they have different preferences. Hence, conflict will always be present.

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* this is somewhat similar to Karl Marx's dualism in that man's experiences and his response to those experiences form the complete set