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Food crisis - the chronic issue
Thu, 7 Aug Pre-Open

Food crisis problem is not new for India. The situation is now becoming more critical as population burden has just kept increasing. The government has now to cater to the demands of a having 1.2 billion populace.

The problem of rotting grains and starvation deaths has not been new one, in India. As per the article on Bloomberg, around 255 m people go hungry despite stock piles.

The article has also highlighted that, various sites where Food Corporation of India (FCI) stores its grains were found out of order. While at some places the food grains were found rotten on other sites the grains were left in open area, covering them with plastic sheets. Approx 40%-44% of wheat and rice is diverted from beneficiary households. These huge quantities of food grains are wasted due to lack proper storage and negligent governance.

In the recent Union Budget, the government has proposed to allocate Rs 1.15 trillion rupees towards food subsidy and Rs 729.7 billion rupees towards fertilizers subsidy. While reasonable proportion of expenditure is doled out for subsidies, but these subsidies do not seem to be utilized in the right direction. So does that mean that subsidies are not required or government should curtail subsidies?

In our view, one of the major problems on the subsidies front is that they have been misdirected to a large extent till now. The government seems to have been paying for all the inefficiencies in the system since many years. Thus it's high time for the government now, to take steps which can control this mismanaged expenditure instead of curtailing subsidies.

There is an urgent need to correct the loopholes in procurement, storage and distribution fronts for greater efficiency. And thus government needs to focus on the infrastructure needs. This in a way will keep check on rising food prices and control inflation which is one of the important challenges for the country.

While the new government has shown keen interest in the infrastructure development, we will wait and see how well the policies are implemented and steps government takes to bring an end to decade's old stigma of the country.

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