Most of the poorest states are broke. (Illustration by C R Sasikumar)
As the monsoon advances, there is an urgent need to consider what can be done to prevent hunger during the rainy season — the hardest time of the year for poor families in large parts of rural India. The monsoon is expected to be good, but the kharif harvest is many months away. Meanwhile, with their reserves depleted by the lockdown, millions of people will find it hard to keep on going. The National Rural Employment Guarantee Act (NREGA) may help, but large numbers are likely to remain exposed to food insecurity.
So far, the public distribution system (PDS) has protected the bulk of the population from hunger. This owes much to the doubling of food rations for an initial period of three months, starting last April. In recent telephonic conversations with local observers in 46 blocks spread all over Jharkhand, we learnt that double rations were reaching in 42 blocks. This is not perfect, but it does make a big difference, and if it is happening in Jharkhand, chances are that double rations are — by and large — reaching elsewhere too. Food rations are, at any rate, certainly reaching a large majority of poor households — that much is clear from a series of recent surveys.
There is, thus, a strong case for extending the double rations beyond the end of June, for another three months at the very least. Resources are not a problem since the country has gigantic food stocks: According to the official Foodgrains Bulletin, the “central pool stock” (including rice equivalent of unmilled paddy) was as large as 80 million tonnes on April 30, 2020, when wheat procurement was still in full swing.
Doubling food rations, however, is not going to help households that have no ration cards. As of now, ration cards issued under the National Food Security Act leave out more than 500 million people, a majority of whom have no ration cards at all (some have state-specific ration cards, with or without foodgrain entitlements). Because of abundant exclusion errors in the distribution of ration cards, those left out include not only the so-called middle class but also many poor households. Identifying poor households, a problematic exercise at the best of times, would be particularly difficult in this crisis situation, when time and resources are short. The best way forward may be to issue temporary ration cards to all left-out households in rural areas and urban slums. The excess foodgrain stocks are large enough to make this possible, along with continued doubling of food rations for the time being.
What is particularly urgent is to provide additional foodgrain allocations to the poorest of states (mainly in the eastern region) for the purpose of expanding the coverage of the PDS, if only on a temporary basis. So far, the poorest states have received no special attention in this crisis, partly because the coronavirus spared them to a large extent. Looking ahead, however, there are several reasons to be very concerned about their predicament.
First, India’s poorest states are extraordinarily poor, with large sections of the population on the margins of subsistence. It is doubtful, for instance, that any country in the world has a higher concentration of extreme poverty and hunger than Bihar. A prolonged period of mass unemployment would spell disaster for millions of people there who barely survive from the meagre wages of casual labour in ordinary times.
Second, the poorest states, and their working population in particular, are likely to bear a disproportionate burden of the current economic crisis. In the better-off states, local workers may benefit from the mass departure of migrant workers in the form of better employment opportunities as and when the economy revives post-lockdown. But in the poorer states, the opposite will happen: The labour pool is all set to swell as migrant workers return, further diminishing the employment prospects of local workers.
Third, the poorest states are yet to be seriously hit by the COVID-19 crisis. The moving map of COVID-19 cases in India clearly shows that the virus is now spreading to the eastern region from other parts of the country. In Bihar, the number of cases is already rising fast. The mass return of migrant workers is not going to help matters, nor is Bihar’s high population density. The preparedness of the health system in the poorest states is abysmal. One shudders to think what will happen if COVID-19 cases in Bihar reach levels similar to those prevailing in Maharashtra today.
Finally, most of the poorest states are broke. In Jharkhand, according to state finance minister Rameshwar Oraon, tax collections have crashed to 30 per cent of their normal levels. The state government is short of money on all fronts, to the extent that some salaries are not being paid. The central government has recently raised the borrowing limits of state governments, but this is conditional on complex reforms — notably in the electricity sector — that are unlikely to happen in a hurry (“cooperate or else” seems to be the tacit motto of cooperative federalism). The cash crunch is hindering the state governments’ relief efforts at every step.
For all these reasons, the poorest states urgently need special support, including additional foodgrain allocations. Universalising the PDS in the poorest states would take very little, because the baseline coverage there is already high. In rural Jharkhand, for instance, the baseline coverage is 86 per cent of the population, and raising it to 100 per cent for six months would require just 1.2 lakh tonnes of foodgrain — less than 0.2 per cent (yes, one-fifth of one per cent) of the central pool stock. It is startling to hear that the central government recently rejected a request of the Jharkhand government for a supplementary foodgrain allocation.
So far, the central government has ignored multiple appeals and arguments for constructive use of the country’s foodgrain stocks over the next few months. Time is running out. Unless the Centre sees the light, excess food stocks are all set to stare at us during the monsoon even as poor people skip meals or worse.
This article appeared in the print edition of June 9, 2020, under the name ‘An umbrella in the rain’.
The writer is Visiting Professor at the Department of Economics, Ranchi University