Sunday, September 01, 2013

Why I support the Food Secuirty Bill

Yesterday, I participated in a Social Audit of the Public Distribution System organized by the Bommanahalli unit of the Loksatta Party. It reinforced my support for the Food Security Bill passed by the Loksabha.

Being a right liberal (libertarian), let me explain my support for this welfare measure.

1. PDS is already implemented by States. NFSB merely provides more funds from the Union. I agree with left-liberal economists that the increase in spending because of NFSB is close to about 30000 crores per annum and that food is an investment on India's work force and not a freebie.

2. The poor contribute a very significant portion of the Union's tax kitty by way of Indirect taxes (sales and services). I believe tax revenue from such consumption based sources must necessarily be spent on welfare or not imposed at all. A program to nourish those taxpayers and their children, to the extent of ~60% of the population at about 1.2 lakh crores makes a lot of economic sense.

3. I have my own solution to fix PDS by adopting what works in states, namely universal coverage, tighter govt oversight on shops and govt owned transportation. There are about 5 lakh ration shops in the country mostly owned by individuals and few SHGs. My proposal is to allow FCI to open retail shops on a massive scale and encourage organized retailers like SHGs, Amul, HopComs, Karpagam, Food Bazaar, Reliance, Walmart etc to become PDS retailers. There is an incentive for private retailers to become PDS retailers because of volumes and sale of non-PDS items from their stores.

4. We need to make a distinction between,

a. public investments (public schools and hospitals, PDS, polio vaccine) which are necessary,
b. tax exemptions (IT parks, custom/excise duty waivers, income tax deductions, farm income) which are acceptable and
c. freebies (farm loan waivers, free rice, color tv, energy subsidies (electricity, petrol, diesel, LPG, kerosene) which are downright wrong and immoral.

2 comments:

Ellie K said...

Yay! Good for you. Your support of the Food Security Bill seems sane and sensible to me.

It has become fashionable among the high-tech crowd to be libertarian. That may change, now that the technocrats are finding libertarian concerns e.g. the Fourth Amendment to the U.S. Constitution (privacy rights) to be rather inconvenient for e-commerce. It is also at cross-purposes with the current presidential administration's objectives regarding surveillance.

I found this quite amusing, and thought that you might too: "Libertarians are the new communists". via Bloomburg BusinessWeek (of all places!) 5 Sept 2013. It attempts to vilify aspects of a libertarian agenda e.g. preferring state and local say in education rather than centralized edicts from Washington DC; non-interventionist policy in Syria; and again, concern over surveillance state.

I agree with you, 100 percent, about the vital necessity of government and tax payer investment in public schools, hospitals, vaccination programs, certain tax exemptions (though not as many as you list ;o) but NOT free color television and smart phones with excessively fancy features!

Balaji Chitra Ganesan said...

i think its only natural that communists and libertarians agree on few things.

thanks for the article, though I don't agree with that author! i have no problems with socialists, capitalists, communists, anarchists, nationalists or even fascists, as long as one agrees to disagree on things and still find common ground when it exists.