Food Security Bill: Good for Politics, Terrible for Economy
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By Vibhuti Agarwal and Shefali Anand
Though approved by the Cabinet Sunday, the fate of the much-anticipated Food Security Bill, which will guarantee cheap food for India’s masses, is far from sealed. But it already is scaring economists who see it as a huge financial burden on the government at precisely the wrong time.
Divyakant Solanki/European Pressphoto Agency
Economists believe spending as proposed by the food security bill “will just make the fiscal side bleed even more.” Analysts said the Cabinet’s nod was done with an eye toward the assembly elections in five states early next year. The bill is to be tabled in Parliament this week. And in an unusual step, Parliament Monday extended its session by three days to end early next week, according to Indian media reports, giving legislators more time to deliberate. Still, political analysts say the Food Security Bill may not get passed by the end of the session since Parliament’s attention is likely to be taken up with a contentious anti-corruption bill. After being introduced, the food bill will likely be sent to a standing committee for further discussion, a process which typically takes weeks. Once it does reach the voting stage, all political parties are expected to support the bill which will provide subsidized food grains to 75% of the rural population and about half of urban households. “No political party is in a position to refute a pro-poor measure openly,” said Chintamani Mahapatra, professor of political science at New Delhi’s Jawaharlal Nehru University. But analysts denounced the bill saying that it will not spur economic development but instead add to the government’s financial...
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