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Political Play
CA Dr Sunil Gupta
Food and Employment Security- Can our economy allow this? 12 May, 2014
For how long do we feed our children? Post a certain age, they are expected to earn their livelihood and feed the family. In the same context, surely, helpless and deprived members of the society deserve extraordinary treatment owing to the fact that our moral values advocate this.

Child welfare programmes, schemes for differently abled members, and arrangements for the families of soldiers, are as justifiable as earning prospects for an educated youth. On the contrary, assuring basic facilities for all the members of the society despite of their non-participation in the process of nation building cannot be justified. This may sound cold-hearted in a country wherein the residents struggle to earn funds and to procure meal for a time.

Let us view this comprehensively. The UPA-led union government came up with two schemes that might look socially viable at first glance; however when comprehended prudently, the food and employment security schemes are neither socially nor economically sustainable.

In case they were, the Indians would not have to wait for so long. Or for that matter, every nation in the world would have implemented such a scheme and could have afforded to be listed among the array of developed nations. The foremost concern that strikes is the fiscal deficit of the GOI that nobody could now even remember as to when this was in a positive figure. Means, the caretaker of the family has been spending more than the earnings since past many decades.

Let us take a bird’s view at the scheme that assures food. Approximately two-third of the Indian population would be provided with rice at INR 3/Kg, wheat at INR 2/Kg, and coarse grains at INR 1/Kg. Some categories are even eligible for daily free of cost meals. The outlays to back this project are estimated to be INR 1.25 trillion annually. Further, the Technical Advisory Committee on Monetary Policy has commented that the scheme will inflate the food prices unexpectedly.

The execution of the Bill will bring in acute rise in the already-high fiscal deficit that in turn would result in macro level inflationary pressures. Competition would be trimmed, money will be shifted from investments in agriculture to subsidies, and the rising demand of proteins, fruits and vegetable will be least taken care of.

Secondly, the MGNREGA scheme that was executed with a view to guarantying earning prospects to the residents of the rural part is no way distinct from the Food Guarantee scheme. With the government turning into a creator of employment, the results are hyperinflation, deficiency of investment, overpriced labor, and elevated cost of living. Better wage and simpler work under the MGNREGA scheme have lured laborers, which has created shortage of workforce in agriculture and manufacturing concerns. Vital to note, agriculture labor cost has augmented by 300 percent owing to the fact that laborers in the rural parts prefer easier tasks under the scheme and are contended with what they are earning. A will to work extra and think beyond boundaries has perished.

Think what MGNREGA is doing in real terms? Uneducated rural inhabitants are being motivated to earn their livelihood under the shelter of artificial earning prospects created by the government. Can the so-called beneficiaries of this scheme ever rise in terms of education and living standards? The economy on the other hand is crying too. INR 2.3 trillion have been expended by the government with no additions to durable assets that could promise sustainable development of the rural areas.

With high wages demanded by the rural inhabitants, the producers are forced to elevate the process of the goods. Supply constraints have reached their supreme high. And known to all, is the corruption and misappropriation of funds by the contractors and officers-in-charge of the scheme.

Social benefit schemes are unquestionably the pillar of success for the society at large. Western countries have even more of such schemes as compared to India; however those nations are developed and can afford such measures. Plus, in no way are they declining the will of the members of the society to work hard for earning livelihood. The bureaucrats of India have been short of visionary capabilities when such measures are talked about.

Above all, is the illicit gain that the political parties look for while considering such schemes. Votes are what that motivates our law-makers to come up with such absurd propositions. It is almost sure that a new set of administrators would come to power post the 16th of May and the nation urges for real works with top to bottom restructuring of such obnoxious and socially evil schemes.

Editorial NOTE: This article is categorized under Opinion Section. The views expressed in this article are solely those of the author and do not necessarily represent the views of In case you have a opposing view, please click here to share the same in the comments section.
About The Author
A Chartered Accountant by profession and Director on the board of Punjab National Bank (PNB), General Insurance Corporation of India (GIC) and Rural Electrification Corporation Limited (REC). Dr. Sunil Gupta is working flawlessly for the economic and social prosperity of India. His Linkedin and twitter handles are @cadrsunilgupta. Facebook page is CADrSunil.
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