In 2011, the government had agreed a draft law that will expand supply of cheaper grains to its poor, a plan if ratified by parliament could widen the fiscal deficit but secure voter support for the ruling Congress party and its allies.
The National Food Security Act, an election promise of the party, could ease voter anger at near-10 percent inflation and give the government a political breather at a time when it is struggling with corruption scandals and policy paralysis.
Addressing an event in New Delhi, Mukherjee said that India was determined to ensure social, economic and political justice for all.
“Food deprivation cannot be allowed to continue. Strong steps are required to secure for the poor and the needy, greater access to food. Our democracy is committed to ensuring for all its citizens, social, economic and political justice,” said Mukherjee.
On the flip side, the bill will weigh on efforts to meet a fiscal deficit target of 4.6 percent in 2011-12 by nearly doubling India’s annual food subsidies to about $23 billion or 2 percent of GDP.
It could also perpetually lock the government into costly subsidies to ensure steady supplies of rice, wheat and coarse grain from domestic production or imports.
“Green revolution in the 1960’s brought about a considerable rise in food production, but the disproportionate use of the chemical fertilizers eventually led to a decline in the food grain productivity. The need for the balanced use of fertilizers and pesticides should be propagated amongst the farming community through agriculture education and extension programmes,” Mukherjee added.
About 70 percent of Indians live in rural areas, forming the core voter base of political parties.
Nearly 75 percent of the rural population, or 630 million people, and 50 percent of urban people, or 180 million people, will be eligible to receive grains at cheaper rates.
The beneficiaries are divided into “general” and “priority” households with the latter recognised as the more vulnerable group but yardsticks for this have not been decided yet.
The bill identifies 46 percent of the rural beneficiaries and 28 percent of urban beneficiaries as “priority” households. About 40 percent of India’s population live below $1.25 a day.