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India has the economic capacity to implement Food Security scheme, says KV Thomas


Karan Thapar,CNN-IBN
Jul 07, 2013 at 09:08pm IST

New Delhi: Food Minister KV Thomas said India can afford the Food Security scheme and that the government's priority is to provide food to the people of the country. In an interview with CNN-IBN's Karan Thapar, the Minister also dismissed the BJP's claims that it was not consulted on the Food Security scheme before the Cabinet cleared the ordinance.

Here's the full transcript of the interview:

ALSO SEE BJP was consulted before the Cabinet cleared the Food Security ordinance: KV Thomas

Karan Thapar: Hello and welcome to Devil's Advocate and in an interview about some of the important issues concerning the Food Security Ordinance with the Food Minister KV Thomas. Professor Thomas let us start with the question - can India afford the Food Security ordinance? In December 2012, the commission for agricultural cost and prices did a study which shows that in the first year itself the Food Security Ordinance will cost the exchequer Rs 2.41 lakh crores and that means it is two and a half times the allocation made in the budget - can we afford such a jump in expenditure?

KV Thomas: See already there is a targeted public distribution system. Till '97 we had a universal system. In the present existing system, as per the 2000 censes and '92-'93 poverty line, our subsidy component is Rs 1.9 lakh crores.

Karan Thapar: The budgeted component is actually Rs 90000.

KV Thomas: I know that, you also know that the component and when the actual expenses come that will be worked out.

Karan Thapar: And your colleague Sharad Pawar's ministry under which the commission for agricultural cost and prices come has estimated that if you are going to guarantee grain, you need first to stabalise production. And they have estimated that to do so you need to spend Rs 110 crore in three years, which is why the cost for food security in the first year is Rs 2.41 lakh crore that is two and a half times the Rs 90000 budgeted in the budget. Can you afford it?

KV Thomas: That is what I said, already there is a targeted public distribution system. No government in power can get out of it.

Karan Thapar: But you are increasing it two and a half times.

KV Thomas: Yes, I'm coming to that point. See what is our expenses now - Rs 1.9 lakh crores.

Karan Thapar: And it is going up to Rs 2.41 lakh crore.

KV Thomas: Let me come to my point. That is on the basis of 2000 censes. According to 2010 censes it will become Rs 1.13 lakh crore. Now what is my expense?

Karan Thapar: But you are still doubling it.

KV Thomas: No, that is not correct. My expenses of subsidy component has been calculated with all the nutritious programs, like mid-day meal, every thing together and sharing some of the cost of the transportation...

Karan Thapar: Minister what you are leaving out are three critical factors that your own commission for agricultural cost and prices thinks is very important. First of all you're are leaving cost of stabilising production, that is an additional Rs 110 crores. Then you are leaving out the cost of developing external and extra storage. You have storage capacity of perhaps 30-40 million tonnes, you need for an additional 30 million tonnes. And you are also leaving out the cost of railway extension, to give you the carrying capacity. All together, what the CACP has said is that in three years you will be charging an additional Rs 6.82 lakh crore to the exchequer. Can you afford it?

KV Thomas: You see already, at present, there is an existing scheme by which I need 60 million tonnes and what is my additional burden, another 2 million tonnes. That 60 million I have to procure, 60 million I have to store, 60 million I have to transport.

Karan Thapar: No minister, I will tell you why the CACP and remember this is a government body, I'm not quoting some external body, the CACP says that you are over looking the fact that in 2002-2003 grain production suddenly in that year fell by 38 million tonnes. Now when you are guaranteeing it and it happens again, you are in trouble.

KV Thomas: I'm looking at the data provided by the Ministry of Agricultural.

Karan Thapar: Which is where the CACP comes.

KV Thomas: CACP should also be a part of it.

Karan Thapar: So why have you ignored it.

KV Thomas: No I have a data from the Ministry of Agricultural. This is what they say that in 2011, over total rice and wheat production was 187.82 million tonnes. And we procured 61.41 million tonnes.

Karan Thapar: But Minister you are talking about production at a time before a guarantee came into being. Once you guarantee comes into being...

KV Thomas: Look at this. This is from the Ministry of Agriculture, they have calculated up to 2039 to 40.

Karan Thapar: Professor Thomas can I interrupt? See you are talking about production at a time when there was no guarantee given by the law to the people, now there is a guarantee. Now if after the guarantee production falls dramatically as it happened in 2002-2003, when it fell my 38 million tonnes, you need to have stabilise production to ensure that you can ride out that sort of problem. Which is why CACP says you need to spend an additional Rs 110 crore.

KV Thomas: See I have got a different commitment, instead of a welfare scheme, I want to make it a legal entitlement.

Karan Thapar: This is why the CACP warning is so important.

KV Thomas: That may be their views, but I have taken all these calculations from Agricultural Ministry.

Karan Thapar: Let me put it like this because I don't want to confuse the audience with too much technical detail or too many figures. You are saying to me that the concerns expressed by the CACP in December, just six months ago and the CACP is part of your government, are concerns that you have set aside or you don't take seriously or you have overridden, that is what you are saying.

KV Thomas: No I don't want to bring CACP on a discussion point line. What I'm telling is that my data is from the Ministry of Agricultural.

Karan Thapar: So you are ignoring that CACP warning?

KV Thomas: CACP's recommendations may be either rejected, very often that are accepted also.

Karan Thapar: But this time you have rejected it?

KV Thomas: No, I'm neither rejecting nor accepting, I will go through that.

Karan Thapar: It is a bit late to go through because the ordinance is coming into effect.

KV Thomas: No that is our direction of concern from welfare scheme, I am going to a legal entitlement.

Karan Thapar: Which is why the CACP concern is paramount because they say without stabilising agricultural you can't guarantee it.

KV Thomas: We have discussed all those things and we have come to a conclusion that our commitment is legal entitlement.

Karan Thapar: Let us then move away from the question of affordability, lets come to a second equally critical question, whether you can actually meet the guarantee that you have given? And the concern is this, can you ensure that the people to whom you are guaranteeing cheap grain will actually get it, because once again the CACP says that in 2009-10 of the 42 million tonnes of grain allocated to the targeted Public Distribution System, only 60 per cent got through to the intended beneficiaries. 40 per cent was wasted. Can you be sure the same thing wont happen again, perhaps even on a bigger scale?

KV Thomas: There also we have to examine this. In 2009 during storage, transportation and procurement, my damages and losses were to the tune of 2.5 per cent. Now with this year, my losses have come down to 0.07 per cent.

Karan Thapar: I have to point out to you that the CACP, which is the government body, has said that your loss in 2009-10 was 40 per cent.

KV Thomas: No, don't put everything on CACP. It is an institution, I respect it but I...

Karan Thapar: But CACP is a part of the government, it comes under the Ministry of Agriculture.

KV Thomas: Don't take CACP as a Bible. Very often the Cabinet, many of the recommendations of CACP has not been accepted. There has been occasions, I was in the Parliament.

Karan Thapar: This is another warning from CACP that is rejected again?

KV Thomas: Do you think that I should follow CACP only?

Karan Thapar: Except that they are your official advisers, they are part of the government.

KV Thomas: You tell me, you are a learned man, you are an experienced, are you going to tell me that I follow only CACP? Should I follow the Agriculture Ministry and their recommendations, should I not follow that?

Karan Thapar: But the CACP is a part of the Agriculture Ministry.

KV Thomas: Yes, alright. It is part of the agriculture, so many institutions are there, their recommendations are looked into it, examined. I have a lot of respect for CACP. But sometime, very often, we have not accepted the recommendations.

Karan Thapar: Let me put it like this, it is your prerogative as a Minister whether you follow the CACP or ignore the CACP. One consequence of ignoring the CACP, particularly if the CACP turns out to be correct in its calculations, is that in the first year of Food Security you will end up wasting over Rs 90,000 crores and over 3 years they say you will end up wasting Rs 270000 crores. Can India, essentially a country where you have money which is needed by the poor, afford such level of waste?

KV Thomas: See my concern is for nutritious food to the people as their legal right, that is where I stand now. And there is existing system where there are lacunas, where for example you are telling about the losses and damages. In Public Distribution System there are damages, even there are loop holes to the tune of 10 to 15 per cent, which we are correcting. See when I started in 2009, we had 22,00,00,000 of Ration Cards from that it has come down to 16,00,00,000.

Karan Thapar: The point that I made was a little different, I am actually asking you as a Minister, if the CACP who you have rejected, turns out to be...

KV Thomas: I am neither rejected nor accepting.

Karan Thapar: You are ignoring them.

KV Thomas: No, let us have that understand. Let us... we accept certain things, certain things we examine. And don't make any institution above everything.

Karan Thapar: Alright, I wont put the CACP above you. You are Minister, you come first, they come later. The question I am asking is this, and I am repeating it, if the CACP turns out to be right, they are saying in the first year of Food Security you will have wasted over Rs 90000 crores, over 3 years you will have wasted over Rs 270000 crores.

KV Thomas: See, you should understand there is an existing system by which I am committed to distribute 60 million tonnes through the PDS system and what additional is 2 million tonnes. 62 million tonnes is what I need in the Food Security Bill.

Karan Thapar: Let me put this to you...

KV Thomas: Any government, any democratic government can get out of the TPDS system, it is an existing system...

Karan Thapar: Alright, let us then put this issue aside as well. Let me come to this question of the additional procurement of grain that is necessary so you can fulfill you obligations under the Food Security norm. You are saying it is only 2 million tonnes, the CACP and many experts say that actually the additional procurement will be close to 5 or 6 million tonnes.

KV Thomas: See, I got data which is projected by the Ministry of Agriculture, where they have projected up 2039 to 40 and they say in 2039-40 we will have the production of 253.24 million tonnes and we have to procure 82.75.

Karan Thapar: That's a projection, projections can go wrong.

KV Thomas: Give me one minute, last year I procured 82 million tonnes, when I needed only 60. Then I have to distribute it under the various schemes.

Karan Thapar: Minister, what happens if your projection for this year or next year goes wrong. Remember we are a monsoon dependent agriculture country. If the monsoon fails, which it often does, what will you do? You will then have to import to make your guarantee filled and that means you will ruin the current account deficit even more, and it is already worryingly bad, you will damage the rupee and you will kick up inflation at home.

KV Thomas: Even though I am a Thomas, I am not a doubting Thomas. I have got some parameters, I depend on the parameters and I trust that parameters. What I did is...

Karan Thapar: Are you trusting too much that's what I am asking. You are relying on the projections.

KV Thomas: Not too much, it is my practical knowledge. You remember, last year I procured 82 million tonnes, when I needed only 60 million tonnes and I had to get out of that stock through different mechanisms like OMS scheme, export.

Karan Thapar: Can I put this to you?

KV Thomas: Yes.

Karan Thapar: Many analysts, may industrialists, many economists are worried that your Food Security scheme is well intentioned but it is financially unviable. They say that is something that India should have undertaken when growth was at 8 and 9 per cent levels. Now that it is fallen to 5, this is risky. Postpone it by 2-3 years, it will be acceptable then. At the moment, its inadvisable.

KV Thomas: You know what is the present complaint, you started in 2009...

Karan Thapar: If you had done it in 2009, you would have been doing it at the right time. You are doing it actually when the economy has collapsed in terms of growth.

KV Thomas: I initiated in 2009, I had to make so many infrastructural developments. I was not sleeping these four and a half years.

Karan Thapar: Minister, I am not questioning the delay. I am questioning, have you chosen the wrong time to start?

KV Thomas: Not at all, we have to start at a particular point of time, we have done our homework and I am 100 per cent confident. To be very sincere with...

Karan Thapar: The economy can withstand the additional burden at this point of time?

KV Thomas: India has the capacity, India has the ability to implement this scheme.

Karan Thapar: You are not worried that this will put off investors, that it will retard growth, that it will damage the rupee and worst of all, it will increase inflation.

KV Thomas: When you are giving food to the people as a right, my priority is for them. I am very confident.

Karan Thapar: In which case, what do you say to Chief Minister Jayalalithaa of Tamil Nadu, who at the moment has the Public Distribution System that gives 100 per cent coverage. You are now forcing her to reduce it to 67 per cent and more importantly she points out that the allocation that she gets at the moment of 2,96,000 tonnes per month, will fall to just 2,24,000, which is the reduction of 25 per cent.

KV Thomas: I can assure you every state, whatever they are getting now, will be ensured to get that, number one.

Karan Thapar: So Jayalalithaa's concerns are wrong?

KV Thomas: I have already talked to all these people. Second, she is giving free, how? I am giving at Rs 5 per kg per rice, she gives a subsidy of Rs 5. Now tomorrow I am going to give at Rs 3, they are getting a benefit. I don't think...

Karan Thapar: In other words she is saving Rs 2 of her subsidy.

KV Thomas: Yes!

Karan Thapar: Alright, let us leave that there. Let us take a break, when I come back I want to talk to you about the manner in which the Food Security law has been enacted. Why have you chosen an ordinance, when Parliament is going to be meeting in 3 weeks or 4 weeks time and a bill would have been more suitable. That's in a moments time, see you after the break.

Karan Thapar: Welcome back to Devil's Advocate and an interview with the Food Minister KV Thomas. Professor Thomas let us come the way the Food Security law has been enacted. The Monsoon Session of Parliament will happen in 3 or 4 weeks' time, so why have you done it by ordinance just before Parliament convenes?

KV Thomas: See this bill was first introduced in December 2011. It went to the Standing Committee. In the Standing Committee there are representatives of all political parties.

Karan Thapar: You are saying to me Parliament has dragged its feet, therefore you are finding a way of circumventing Parliament.

KV Thomas: No, I am telling the procedure.

Karan Thapar: No, that I know, I am asking why have you gone for an ordinance now?

KV Thomas: I am coming to that point, my point is that we are not hasty, we have not come out of the way, we have not circumvent the Parliament. The Parliament sent to the Standing Committee and, that is important point, Standing Committee has representatives from every political party and Standing Committee's recommendations we accepted together.

Karan Thapar: Minister, you are not circumventing Parliament because before this becomes permanent, it has to be passed by Parliament. But what you are doing is you are misusing an ordinance. Soli Sorabjee, possibly one of India's greatest Attorney Generals has on record said that firstly an ordinance is only emergency mechanism and secondly it can only be used or should only be used if you cannot wait for Parliament. Now that doesn't apply in this case.

KV Thomas: That is what I am explaining.

Karan Thapar: But it doesn't apply.

KV Thomas: We have gone to the Standing Committee. Standing Committee took one year and their recommendations were unanimous, we accepted that.

Karan Thapar: But why not then wait for Parliament?

KV Thomas: Then I went to the Parliament, I went again to the Parliament. Last two sessions, the discussions started, they did not allow the discussions to continue. Even the question hour was not allowed to be taken.

Karan Thapar: So you are saying that you are using an ordinance because Parliament has frustrated you?

KV Thomas: No, the opposition parties did not allow the Parliament to normally function, even my discussions were not allowed to continue.

Karan Thapar: In which case, if that is true, then why didn't you bring this ordinance immediately after the Budget Session ended? Why have you waited two more months?

KV Thomas: I tell you, we had been discussing. You know last 13th , this was an agenda at the Cabinet ordinance but prudently we took a decision.

Karan Thapar: Can I interrupt, can I put this to you? If the reason you are going to an ordinance is because every time you tempted to go by Parliament, Parliament wouldn't discuss it and opposition would disrupt it, then you should have issued the ordinance immediately after the Budget Session. You didn't, you waited two more months and now you are issuing it just before the monsoon session.

KV Thomas: No, even this 13th we tried to discuss with the opposition parties and a team of ministers discussed. We did it and many of them did not agree.

Karan Thapar: You haven't discussed with any party from the Left, Prakash Karat has made that clear.

KV Thomas: I know myself.

Karan Thapar: Did you discuss with the BJP?

KV Thomas: We have discussed.

Karan Thapar: Did you discuss with the BJP?

KV Thomas: Not me, we have a team of...

Karan Thapar: Did any one discuss with the BJP?

KV Thomas: Yes.

Karan Thapar: Who?

KV Thomas: That is in the Cabinet itself, the last Cabinet itself when this came to an ordinance this time, last Wednesday. Shinde said, we have, he and Kamal Nath, interacted with all political parties.

Karan Thapar: He couldn't have had interaction with all political parties, Prakash Karat is saying he hasn't. Did he have interaction with the BJP?

KV Thomas: I have been entrusted to discuss with some other parties, I have done that.

Karan Thapar: Who discussed with the BJP?

KV Thomas: I was told in the Cabinet by Shinde that they have discussed with all the political parties.

Karan Thapar: Do all parties include the BJP, I am emphasizing this?

KV Thomas: Yes.

Karan Thapar: So hang on, this is very important. You are saying to me that the government did discuss with the BJP and because you didn't get a favorable response, you are then going for an ordinance?

KV Thomas: Yes.

Karan Thapar: You are on record saying this?

KV Thomas: Yes, I am telling you because this was disclosed in the Cabinet, by none other than the Shinde.

Karan Thapar: So when the BJP turns around and says that no discussions were held with it, you are saying that it is being less than truthful?

KV Thomas: No, I am trusting my colleague who said in the Cabinet, this has been discussed.

Karan Thapar: With the BJP, I am repeating that again and again.

KV Thomas: Yes, yes, yes! They said including BJP. And he told me in the Cabinet that they want the Chhattisgarh model, they don't want this. This is their answer to this team of Shinde and Kamal Nath. That is what I could understand.

Karan Thapar: In other words, you are not prepared to accept any of the amendments the BJP or the Left bring?

KV Thomas: We are ready, let them agree to have this discussion in the parliament.

Karan Thapar: It is very possible that you may have to accept some of those amendment because the Samajwadi Party is against it. So if you are going to get it passed in Parliament, you may have to accept amendments. Are you open to those amendments?

KV Thomas: We know the democratic principles, let them allow us to discuss. Even you know, I have to again come to the Parliament before 6 months time.

Karan Thapar: If they permit a discussion, will you be open to their amendments?

KV Thomas: Why not? We have to discuss that.

Karan Thapar: And you are open to their amendments?

KV Thomas:No, how can I cay, you bring the amendments and I will accept. You cannot do that.

Karan Thapar: No, you are open to them?

KV Thomas: We are open, open in mind. That is why, you know, my burden after I accepting the Standing Committee's recommendation was doubled.

Karan Thapar: I understand. The one thing I am going to underline for the audience when you say you are open to amendments, it also suggests that the bill that finally emerges may be different to the ordinance that was issued on Friday.

KV Thomas: No I cannot say that now. Now there is an ordinance, let the discussions start.

Karan Thapar: And then the bill will emerge but it could be different.

KV Thomas: No, I don't know.

Karan Thapar: Nor do I but its possible that it may be.

KV Thomas: You can take any assumptions, you have the right to take assumptions but as I stand now with the ordinance, I am going along with the ordinance.

Karan Thapar: Alright Minister, we leave it there. A pleasure talking to you.

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