Shocking: 80 cr out of 130 cr Indians can't afford food

The socio-economic situation is in for big shocks as freebies will disappear and many a bubble is set for a burst, earlier than expected. Commerce and Industry Minister Piyush Goyal was in Hyderabad for a businessmen's meeting. From the luxury hotel venue, he made a startling revelation that the government has been giving free foodgrains to 80 crore people across the country.

This lot is so poor that they can't afford to buy basic necessities and the government had to extend the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) until December. Under this welfare scheme, 5 kg of food grain per person per month is provided free of cost for all the beneficiaries covered under the National Food Security Act (NFSA) to Antodaya Anna Yojana and Priority Households, including those covered under Direct BenefitTransfer (DBT), says PM India website.

The highly subsidised prices are Re 1 per kg of coarse grains, Rs 2 for a kg of rice and Rs 3 for a kg of wheat. Plus, the people covered under PMGKAY get 5 kg of food grains per person free of cost. The NFSA scheme has anothersubsidy point - assistance to States and UTs for meeting expenditureon intra-State transportation and handling of food grains and fair price shops (FPS) dealers and margin.

I am not trying to belittle in any way the condition of the vast majority of the people but focusing on the state of the economy. The 80-crore figure raises many questions? Has Covid created such a major divide that more than 60 per cent of the population has to be given big support? What could be their living conditions if they are in such a dire situation?

Where and how are we going to get the much talkedabout consumption moving ahead? Obviously, this majority does not even have the means to even buy food? Are they ill-employed or unemployed? The more we think about it, the more mind boggling itgets. Most importantly, what about the leaks? Or is the system so fool proof that everything is hunky-dory?

India is known for its corruption. I am not saying it. Former PM late Rajiv Gandhi had himself said in 1985 that on every rupee the government spends, only 15 paise reached the beneficiary. Even the Supreme Court had quoted this in its ruling on Aadhar and said this malaise could be taken care of by the unique identity cards.

Now, talking about the governance during the last eight years or the68 years before, one may well ask as to what have the successivegovernments achieved? 60 per cent poverty? Or, as some economists said, the demonetisation had dealt such a deadly blow to the informalsector that the below poverty line lot has increased by leaps and bounds, and the Covid-triggered lockdown has worsened it?

Why do we have such a large section of the population having to depend on government ration – highly subsidised or free - if we were to believe the officialstance that demonetisation has actually helped the economy and that Covid shock was a less than a two-year glitch and more importantlythe Indian economy is beating global recessionary trends?

This is bound to have its drastic impact on the GDP unless the peoplewho lost jobs or sources of income are put back into the national economy cycle of earning and spending. Don't forget the farm subsidies, free and discounted power and so on that all add to thedrain on the country's budget projections. De-riding the past governments and slogans such as Congress-mukt Bharat, coupled with the freebies, may help you form double engine governments.

But these double engines have to pull the socio-economy out of the quick sand. The bad mouthing of the Nehru era and dangling the Amritkal carrot may find appeal and help build euphoria, but the rulers will have to take tough decisions that may not be palatable tothe majority. The government may bite the bullet in between the election years, but what happens to the common man who will continue to suffer due the cascading effects of the crisis and heavy tax burden? The creeping fuel price hike may have helped the Finance Minister plug a part of the budget deficit.

Unfortunately, the election years are not uniform. Each year, we have elections in some state or the other. Announcements about freebies and the promises of making India a developed country by 2047 will continue and the leaders quietly keep shifting the goal posts to suit their convenience. A columnist reminds us that the PM had himselfspoken in 2017 about making India a developed country by 2022.Well, there have been many promises that he had to keep while India has miles to go before the 80-crore poor majority have a peaceful sleep (with apologies to Robert Frost and Jawaharlal Nehru), withouthaving to worry about the free rations.

Subsidised or free food grains are bound to hurt the self-respect of the beneficiaries themselves, ifnot today, tomorrow, if not in this generation but the next and if notall of them, but at least few of them. I remember, I used to make freetelephone calls from my advocate friend's office when I was out ofjob for some months. One day, it hurt me so much that I stoppedgoing to his office and I was fortunate enough to find some writingassignments soon.

The sum and substance of all this is that the planners and rulers willhave to start thinking beyond the series of freebies and subsidies andgo for job creation before the start-up and the technology bubblebursts. Just consider this: the free food grain policy could have been stopped as Covid crisis eased, but the government kept extending it,this time until Gujarat and Himachal elections are over in December.So, are the 80-crore people in for a shock?

Let me present another ground reality: the e-commerce industry saw a big jump during Covid and until recently. But there is a slow but definite return ofthe people to the next-door grocery shop as the consumer began torealise that the e-commerce sites charge delivery fee. Alternatively,you are asked to become a premium member at a subscription. It is an open secret that most e-commerce sites are running in losses. One major site just reported losses mounting by over 50 per cent.As regards start-up boom and the rise of unicorns about whicheveryone from Modi to Goyal keep talking, latest reports indicate thatthe valuations of these businesses will suffer in the absence ofcontinued funding.

Business Standard reported quoting Financial Express that the number of unicorns has come down to 84 from themuch celebrated 105.The 80-crore poor chart keeps staring at me whenever I try to paint arosy picture based on the Double Engine promises. We shall keepreporting shockers as we see even slightest signs so that the readersare prepared to brace the future. Keep watching this space.

(The author is a Mumbai-based media veteran, known for his thought-provoking messaging. The views expressed are personal).