Tamil Nadu finally adopts Food Security Act, by adding crores to its subsidy bill

On November 1, Tamil Nadu became the last state in the country to implement the National Food Security Act after holding out for three years. In a government order issued on October 27, the state specified that while it was enforcing the law, it would be modifying its provisions.

Aimed at ensuring access to affordable and nutritious food, the National Food Security Act 2013 seeks to provide subsidised foodgrains under the targeted public distribution system for up to 75% of the rural population and up to 50% of the urban population. For Tamil Nadu, the Central government has fixed coverage at 62.5% of the rural population and 37.7% of the urban population, based on the state’s poverty ratio.

But prior to this move, Tamil Nadu already had a system of subsidies in place that covered the entire population based on a universal public distribution system.

“Most of us who work in food treat Tamil Nadu as a model state,” said Dipa Sinha of the Right to Food Campaign. “When you compare it with all other states, it has lower leakages. It does not face the problem of exclusion because it has a universal public distribution system.”

Free for all

While public distribution began with the universal approach of providing equal amounts of foodgrains to all, many states switched to a targeted public distribution system after 1997. Under this system, beneficiaries were classified into three categories – Above Poverty Line, Below Poverty Line, and Antyodaya Anna Yojana, which comprises the poorest of the poor.

The Centre, which procured foodgrains from farmers at a minimum support price, sold these at subsidised rates to states: Rs 8 per kg for above poverty line families and Rs 3 per kg for those below the poverty line. The states, in turn, supplied the grains to families, usually at the same rates. However, the Tamil Nadu government provided additional subsidies, including free rice to rice card holders in all three categories.

“Politically, the public distribution system is a big issue in Tamil Nadu because in every election, political parties keep decreasing the price,” said Sinha. “This is one of the key issues upon which they fight the elections. So, it is a politically sensitive issue for Tamil Nadu to move from a universal system to a targeted system.”

While free rice has been distributed in the state since 2011, the quantities vary. Households that come under the Antyodaya Anna Yojana get 35 kg of rice a month while the state makes no distinction between families above and below the poverty line, providing them anywhere between 12 kg and 20 kg of free rice.

Pressure from Centre

In 2013, when the National Food Security Act – mandating the provision of 5 kg of subsidised foodgrains per person in a month, with no upper ceiling per household – was announced, it put the Tamil Nadu government in a dilemma.

Most states followed a targeted scheme, so implementing the Act was beneficial for them as they could now provide larger amounts for lower prices.

But for Tamil Nadu, it meant providing larger quantities of grains to each family. The state followed a universal distribution scheme whereas under the National Food Security Act, above poverty line families were usually excluded. Not wanting to switch to a targeted system, the state refrained from adopting the national legislation.

However, on October 7, the Department of Food and Public Distribution at the Centre wrote to the Tamil Nadu government saying that if it did not adopt the National Food Security Act, the Centre would provide foodgrains to households above the poverty line at a minimum support price of Rs 22.5 per kg instead of the current issue price of Rs 8.3 per kg. This would cost the state an additional Rs 2,730 crore annually, over its present expenditure of Rs 2,393.3 crore a year, if it continued with its free rice scheme.

The state government was, therefore, forced to fall in line, but decided to make modifications to the national law to suit its needs.

Modified Act

"With a view to protect the universal PDS that the state has been adopting at present, in which rice is supplied to all rice card holders without discrimination, it has been decided to retain and continue the universal PDS in Tamil Nadu while implementing NFSA," said the Tamil Nadu government order on October 27.

However, it changed the quantity of foodgrains.

Under the Act, if there is one person in a household, they receive 5 kg a month. And if there are two persons, they receive 10 kg per month, and so on.

Tamil Nadu decided to retain its minimum quantity of 12 kg per month, even in the case of a single-member household. The cost of the extra 7 kg for one person or extra 2 kg for two persons will be borne by the state. If the quantity exceeds 20 kg per ration card, the state will then follow the 5 kg per person rule.

The government's move means that many families in the state will now benefit from larger quantities of free grains coming their way.

The state will have to bear the subsidy burden for this, which will amount to Rs 1,193.3 crore a year, in addition to its current annual expenditure of Rs 2,393.3 crore.

"What is appreciable is that the Tamil Nadu government chose to not disturb their scheme, which was the dilemma that they must have faced over the last three years," said Sinha. "The burden of subsidies is quite high already. So, to take the call that they will increase it further but not get into a targeted system is quite commendable.”

Maternity benefits

But the National Food Security Act is not just about the provision of cheap foodgrains through the public distribution system, said Reetika Khera, professor of development economics at the Indian Institute of Technology, Delhi. It also recognises the right to universal maternity entitlements and is mandated to provide every pregnant woman and lactating mother with at least Rs 6,000 per child.

“Tamil Nadu is one of two states in the country that has a maternity entitlements scheme for women in the unorganised sector,” Khera said. Under this scheme, it provides Rs 12,000 per child.

“The state should be asking the Centre to reimburse them at least Rs 6,000 out of the Rs 12,000 they give to women,” she added.

The Centre, though, has not yet begun implementing the maternity entitlements scheme under the food law.

“That is the contradiction from the Central government,” said Sinha. “On one side, they are putting so much pressure on the state as if they care about the NFSA, but for the other parts which the Central govt is supposed to implement, such as the maternity benefit scheme, nothing is being done about it.”