A report of Firstpost caught our attention. It talks about the Food Security Bill, The Minimum Support Prices (MSP) and the way the two will affect us. In short, they will work collectively to destroy our agricultural and food markets. And Firspost seems to be using sound logic to back up this claim. Let us understand their logic.
The Food Bill will ensure that subsidized grains are given to nearly 65% of the country's population. This includes people who need subsidized grain as well as those who do not. Nevertheless the program covers both sections so the fiscal burden of this Bill can be easily imagined. The poor economics of the Bill will lead to fiscal burden. The Commission on Agricultural Costs and Prices (CACP) has already highlighted the hidden costs involved in the Bill. The CACP has stated that the MSP decided by the government is not really based on the demand and supply dynamics. Rather the MSP appears to be arbitrarily decided. Such costs are expected to take the total cost to Rs 6,000 bn over three years. Imagine the fiscal burden this would cause!
Now come to the darker side of the story. The Food Security Bill will make the government a monopoly in the food grain market. It would be the monopolist buyer as well as the monopolist seller. The scams of the past are a clear testimony to what happens each time the government enters a monopolist position. You guessed it right. There is widespread corruption. So how would this affect us? Well it would lead to higher prices and higher food inflation. This means that the final price of all items will go up. Net result - the Food Security bill will make sure that only the rich are able to afford food. And that corruption is rampant.
We do agree with the fact that food security is necessary. Particularly for those who cannot afford food. But will the Food Security Bill really provide this security? The arguments seem to be against it.
The Food Bill will ensure that subsidized grains are given to nearly 65% of the country's population. This includes people who need subsidized grain as well as those who do not. Nevertheless the program covers both sections so the fiscal burden of this Bill can be easily imagined. The poor economics of the Bill will lead to fiscal burden. The Commission on Agricultural Costs and Prices (CACP) has already highlighted the hidden costs involved in the Bill. The CACP has stated that the MSP decided by the government is not really based on the demand and supply dynamics. Rather the MSP appears to be arbitrarily decided. Such costs are expected to take the total cost to Rs 6,000 bn over three years. Imagine the fiscal burden this would cause!
Now come to the darker side of the story. The Food Security Bill will make the government a monopoly in the food grain market. It would be the monopolist buyer as well as the monopolist seller. The scams of the past are a clear testimony to what happens each time the government enters a monopolist position. You guessed it right. There is widespread corruption. So how would this affect us? Well it would lead to higher prices and higher food inflation. This means that the final price of all items will go up. Net result - the Food Security bill will make sure that only the rich are able to afford food. And that corruption is rampant.
We do agree with the fact that food security is necessary. Particularly for those who cannot afford food. But will the Food Security Bill really provide this security? The arguments seem to be against it.
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