Great Expectations

If the next Lok Sabha elections are held on social media, Narendra Modi (Prime ministerial candidate of the opposition) will probably win hands down. In the past few months there have been various opinion polls suggesting that Modi leads his closest rival, Rahul Gandhi (heir of the ruling Congress party) by several miles when it comes to the choice of next prime minister of India. The Business Standard ran an article on September 12, 2013, summarizing the trends of seven opinion polls conducted in the recent past. According to the article, two clear trends emerge from the findings. First is the rise of Bharatiya Janata Party (BJP, right of centre) and National Democratic Alliance (BJP and its allies) as the single largest party and pre poll alliance respectively. Second is, huge losses for Congress (between 75 to 90 seats). What will actually happen in 2014 is anybody’s guess, but BJP is definitely enjoying high approval ratings in almost a decade. Social media and other internet platforms are inundated with pro Modi and pro BJP comments, sometimes even bordering jingoism. On the other hand Congress supporters seem to struggle a lot in defending the indefensible series of scandals and poor governance.  

Outside the social media, the recent public speeches by Modi in various Indian cities have demonstrated his popularity among a large section of urban and semi urban population too (in some cases people paid to attend his public rallies). He seems to have the backing of the middle class. Though there are no clear polls suggesting Modi’s popularity among the rural voters, it can be assumed (based on the other surveys conducted on random samples) that he has some support in the rural constituencies too. Now let us imagine a scenario where Modi is indeed chosen as the next prime minister of India. What should the voters expect from him?

I have an idea, or two

If one reads through the comments on major news paper websites, one thing that catches the attention is the expectation people have from Modi. From rising onion prices to the latest scandal, violation of cease fire on the Line of Control with Pakistan to Tamil fishermen being arrested by Sri Lankan navy, Narendra Modi seems to be the answer to every single problem the urban internet users face. For the ears of BJP and Modi this might be the best music they heard in a while. But let us not forget that it was the same group of middle class, Internet using Indians who marched the streets of Delhi and other cities in support of the anti corruption movement headed by Anna Hazare, it was the same middle class which once again took to the streets to protest against the rape and subsequent death of a student in Delhi. Such was the force of Indian middle class that the government was forced to give in and discuss changes in legislation well into the night.

In the past there have been no attempts from either the BJP or Modi to tone down the expectations people have from them in the next government. This probably suits them well for the time being. But with so much that is wrong with the economy, governance, public health, law and order, etc it will probably take more than just five years to show visible improvement. It takes years for the economy to show any sign of growth after a few bad years. The American economy despite the quantitative easing took almost five years to recover and things are still not the same as they used to. Any improvement in governance might require constitutional amendments. This means long negotiations with the opposition and possibility of a deadlock. These issues are just the tip of the iceberg. The real problems might be worse.

Modi should come up with a separate strategy to manage the expectations people have from him. The middle class, who today is willing to put him on the pedestal, will not hesitate to pull him down if he does not meet their expectations.  

Neither food nor security

India is the second largest, fast growing, large economy in the world. It is also has the second largest population in the world. India is home to 1.2 billion (and counting) people. For the sake of comparison we can say that India hosts a bit more than the total population of Africa on little less than one tenth of its size. Catering to such a huge population is a daunting task, especially when it comes to feeding it. Fortunately India is blessed with large and fertile plains fed by perennial rivers and an annual cycle of monsoon.

The land of surplus

In the year 2011-12, India produced a total of 246.2 million tons of food grain (rice, wheat and coarse grains). The census of India carried out in 2011 is yet to throw up details regarding household numbers and the average household size. But according to the census carried out in 2001 India had a total of 191.96 million households and the average household size was 5.3. The 2011 census tells us that India got an additional 181.96 million people in the decade since last census. Assuming an average household size of five the additional households would number 36.4 million, bringing the current number of households to approximately 228.5 million. A simple math will tell us that 246.2 million tons of food grain and 228.5 million households will leave a little more than a ton of food grain per household per year. The national sample survey organization reports that per capita food grain consumption in 2009-10 was roughly 11 Kg per month. The average household will hence consume 660 Kg a year, significantly less than the available and hence leaving a surplus for storage/exports.

Who moved my grains?

The interesting fact however is that 42% of India’s children are malnourished and 58% are stunted. These are alarming numbers, especially when India is a food surplus country. One might ask where all the food is going. Well, much of it just rots in the extreme weather. India made huge progress in food production but failed to create enough storage facilities. A Reuters report from July 2012 quotes that as much as 6 – 19 million tons of food might perish due to lack of proper storage.

Did you work out the freebies?

But that’s just half of the story. India for many decades has a system of “Public Distribution System” (PDS). A system under which heavily subsidies food grains is sold through licensed shops. Eligible families get 35 Kg of food grains a month, rice at Rs. 5.6 (USD 0.093) per Kg and wheat at Rs. 4.1 (USD 0.068) per Kg. Unfortunately the PDS is one of the most corrupt institutions in India. In certain states less than a quarter of the eligible families get their fair share of food. The rest is siphoned off and sold in open market at a premium. An ugly nexus of bureaucrats and private shop owners play the game with impunity.

The ruling UPA government has recently introduced an ordinance (pending a vote when the parliament meets later in July 2103) providing food security to almost two thirds of India’s population. The food security bill will provide additional five kilograms of food grain at prices lower than the PDS price. The scheme will cost the exchequer INR 125,000 crore (USD 20 billion) a year. This is all good, especially since India is gearing up for the national elections early next year. But the irony is that the government plans to implement food security through the same corrupt and inefficient PDS network. There won’t be any surprises if the additional food grain ends up in open market to be sold at a higher price like the rest of the PDS grains.

One step forward three steps back

The government recently introduced a futuristic programme. Households will get the subsidy on cooking gas directly into their bank account once they pay the market price at the time of purchase. This was termed direct cash transfer. It was supposed to be extended to all kinds of subsidies. The next step for the government should have been to extend the subsidy to food grains and eliminate the corrupt nexus of PDS. Supply of more food grains in the open market would have reduced the prices and the poor could have afforded a better choice in the open market. But the government decided to load the PDS with more grains. It is anybody’s guess what will happen to the extra 62 million tons of grains which will be pumped into the PDS.

Successive governments at both centre and the states have created a society, which lives off the freebies. Free food, free electricity, free television sets, free laptops, etc. have won many elections for the politicians. None of the governments think of long term investments for the overall development of the society. Investments in public infrastructure, education and health care are hardly seen.

The poor will get the benefits of food security bill only if the PDS is eliminated and new infrastructure for proper storage of food grains is created. Pouring more into a corrupt system will not help address the needs of the poor, nor will it send a positive signal to the voters.