Will it be a good idea to weigh down the economy through subsidization at a time when it is already going through the worst phase?
The Food Security Bill was passed on Monday in Rajya Sabha, hardly eight months before the 2014 general election.
The bill, a pet project of UPA chairperson Sonia Gandhi, will now go to the President for his formal consent.
The passing of the bill means the government will supply cheap food grains to 67 percent of the country’s population of 1.2 billion. As formulated by the government, they will sell wheat and rice at subsidised rate to the poor.
As part of the scheme, grains amount to five kilograms per person per month would be provided, which includes rice at rupees 3 per kg to the poorest people, which is less than 10 percent of current retail rates, wheat at rupees 2 per kg and coarse cereals at rupees 1 per kg.
BJP leader Arun Jaitley argued that this bill is just a repackaging and the amount allocated for the BPL families was reduced in it. Simultaneously, left party leader, Sitaram Yechury sought that the bill should be made universal and not just for 67 percent of the population.
The bill is measured as the biggest vote-gainer for the Congress-led UPA government in the upcoming general elections; however, analysts fear that it will add burden on the already glooming economy and increase the current fiscal deficit.
Questioning the timing of the bill, experts said the Indian rupee is crashing at all time low and this step will lead the India currency more towards the downslide.
Though, the government is assuring that the cost of the scheme will not saddle the economy but they are not providing any explanation as to where will they get the money to implement the massive food security scheme.
Will it be a good idea to weigh down the economy through subsidization at a time when it is already going through the worst phase?
