New Delhi: The central government’s decision to sell subsidised wheat flour, at Rs 27.50 per kg under the brand Bharat Atta, is likely to be an election-oriented “symbolic” move and too “minor” an intervention to be of relevance to the rural poor, said economists ThePrint spoke to.
The Bharat Atta scheme was launched Monday by Consumer Affairs Minister Piyush Goyal, who said the move was meant to “increase supplies in the market at affordable rates, and help in continued moderation of prices”.
Bharat Atta follows the launch of Bharat Dal (Rs 60 per kg for a one-kg pack and Rs 55 per kg for a 30-kg pack) in July this year. Both items are to be sold at subsidised rates through mobile vans and at stores of National Agricultural Cooperative Marketing Federation of India (NAFED), National Cooperative Consumers’ Federation (NCCF) India and Kendriya Bhandar.
Earlier, in February, as part of the Price Stabilisation Fund (PSF) initiative, the government had held a pilot sale of 18,000 tonnes of Bharat Atta for Rs 29.50 per kg through these cooperatives in select locations.
This time, according to the government, the products will be offered across the country via 800 mobile vans and at 2,000 locations of these three agencies.
“2.5 LMT (lakh metric tonne) of wheat @ Rs.21.50/kg has been allocated for semi-government and cooperative organizations i.e. Kendriya Bhandar, NCCF and NAFED under Open Market Sale Scheme for converting to atta and offer it for sale to the public under Bharat Atta brand at an MRP not exceeding Rs 27.50 per kg,” said a communication from the ministry of consumer affairs Monday.
The current market rate of wheat ranges between Rs 36 and Rs 70 per kg, depending on quality and location.
Speaking to ThePrint, Siraj Husain, agricultural economist and former secretary in the ministries of food processing industries and agriculture, however, claimed the government’s move was “symbolic” and unlikely to affect the private sector, as few people would be able to benefit from it.
Explaining further, he added that “except for Delhi, the central government does not have retail outlets in other states which can be used for sale of subsidised food items”. “Private trade in wheat flour is unlikely to be much affected by this move,” he asserted.
Welfare economist Jean Dreze held similar views. Terming the government’s move as “a minor, short-term, ad hoc intervention of little relevance to the rural poor”, he told ThePrint that the Bharat Atta scheme was a “distraction from the far more important purpose of implementing the National Food Security Act (NFSA) in letter and spirit”.
The 2013 law entitles “about 75 percent of the rural population and 50 percent of the urban population to receive subsidised foodgrains under Targeted Public Distribution System”.
“The Modi government has persistently undermined the National Food Security Act by defunding mid-day meal schemes, restricting maternity benefits to a single child per family, and freezing the coverage of the Public Distribution System (PDS),” he added.
This month, Prime Minister Narendra Modi announced the extension of the Centre’s free foodgrain scheme, Pradhan Mantri Garib Kalyan Anna Yojana, under the NFSA for the next five years. The scheme provides 5 kg of free foodgrain per person per month to the poor and was scheduled to wrap up this December. The cost of the free foodgrain scheme has been reportedly estimated to be about Rs 2 lakh crore this year.
Last year, the government had announced that, to lower procurement costs and increase efficiency, it would soon invite private players along with the Food Corporation of India and other state agencies to procure food grain for buffer stock. However, the supply of Bharat Atta under the PDS is a shift from that.
Food policy analyst Devinder Sharma believes the scheme will be forgotten once the 2024 Lok Sabha elections are over. “The scheme seems to be borrowed from the Punjab government’s atta and dal scheme,” he said, adding that such schemes do affect market prices.
“The move is welcome. It shows the government is concerned about consumers, but will it provide a high price to farmers? The scope of the scheme seems limited. While supply might be fine, how will the government focus on the quality of wheat? The quality of atta right now is not that great,” he told ThePrint.
Also Read: PM Kisan’s direct transfers can help food distribution. But there are four challenges
‘Not really a significant intervention’
Many see the introduction of the Bharat Atta and Bharat Dal brands as a shift to the era of Nehruvian socialism, when state-produced bread and salt under the brands of Modern Bread and Hindustan Salt were offered to people.
However, these public sector companies were later sold off to the private sector as part of the government’s disinvestment policies. For instance, government-owned Modern Food Industries, set up in 1965, was sold to Hindustan Unilever (HUL) in 2000. It was the first public company to be disinvested under the Vajpayee government.
The Indira Gandhi regime in 1974 shifted the production of wheat from private players to the government, to keep the price of wheat low and stable. Instead, the price of wheat increased sharply — rising by 36 percent —and shortages occurred, according to a New York Times report of 1974.
Additionally, the government’s machinery malfunctioned, and stockpiling and black marketing turned out to be major issues, the report added.
With Bharat Atta and Bharat Dal now, India seems to be “regressing to its socialist past”, economists have argued, pointing out that it may undermine the existing trade in wheat flour.
Husain, however, disagreed that this was a throwback to the past.
“The scheme is not comparable to the failed experiment of nationalisation of agricultural trade,” he said. “It is not really a significant intervention and only has symbolic value. It does not mean that the government is taking over existing trade in agricultural commodities. The central government already distributes more than 60 million tonnes of foodgrain under the NFSA.”
(Edited by Nida Fatima Siddiqui)
Also Read: India’s real food problem isn’t hunger but loss and wastage