NEW DELHI – India passed into law Monday an ambitious program to provide nearly free food to some 800 million Indians. Supporters hailed it as a long-overdue fix for the nation’s rampant poverty while critics slammed it as a shameless electoral ploy the country can’t afford that will encourage more waste and corruption.
The National Food Security Bill gives two-thirds of India’s population the right to buy 12 pounds of rice, wheat, millet or other cereals each month at no more than 3 cents per pound. It also provides food free to pregnant women, lactating mothers and children under 6 years old.
The government put the price tag of supplying about 62 million tons annually at $18 billion, which would make it one of the world’s largest such programs. A Ministry of Agriculture study estimated the actual cost could be at least 30 percent higher.
Sonia Gandhi, president of the ruling Congress Party, pushed hard to get the bill passed as her party prepares to run in general elections early next year on a legacy of policy drift, corruption scandals and economic setbacks.
“We have a chance to create history with this bill,” Gandhi told the lower house of parliament late last month. “The question is not whether we can do it or not. We have to do it.”
After passing the lower house, the bill received final approval from the upper house on a voice vote Monday following 10 hours of debate.
India has a long history of creating noble-sounding welfare programs, only to see them suffer from mismanagement, graft and neglect. Gandhi’s deceased husband, former Prime Minister Rajiv Gandhi, once famously said he felt lucky when 15 percent of government funds reached their intended recipient.
Critics applaud the goal of feeding the poor – India accounts for one-third of the world’s impoverished, according to a World Bank study – but say it will further drain already-wobbly government finances during an economic downturn, undercut farmers’ incomes and dent the overall economy.
“What’s right for elections is wrong for the economy,” said Kiran Mazumdar Shaw, managing director of Biocon India Ltd., a Bangalore-based biotechnology firm. “This is nothing but a populist bribe.”
India’s currency hit an all-time low of 68 rupees to the U.S. dollar last week before recovering slightly. The country’s economic growth has declined for several quarters and is currently around 5 percent. And the fiscal deficit, at 4.8 percent of gross domestic product, is considered worrisome.
Leaders of the main opposition Bharatiya Janata Party on Monday called the bill an electoral “gimmick” that repackaged many existing subsidy programs into something that sounds new. “For four and a half years you never thought of this?” opposition lawmaker Venakaiah Naidu said. “Suddenly, a few months before elections, you are rushing through this bill.”