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Telangana triggers demands for more States

The decision of the United Progressive Alliance (UPA) to divide AndhraPradesh and create Telangana has sparked protests for statehood across thecountry. Dormant demands for separate provinces have re-emerged, and

reluctant State governments are battling new fires.

In West Bengal, the Gorkha Janmukti Morcha (GJM), fighting for a Gorkhalandstate, shut down Darjeeling for the third consecutive day. Additional securitypersonnel had to be deployed. The GJM has said there will be no bandh in thehills for the next two days to enable students and tourists to leave, but therewill be an indefinite closure from Saturday. GJM chief Bimal Gurung hadresigned as chief executive of the Gorkha Territorial Administration on

Tuesday.

Chief Minister Mamata Banerjee ruled out the States division and said:Darjeeling is a part and parcel of West Bengal. There is no question of division. She slammed the UPA government for setting the country ablazewhen elections were knocking at the door, for the sake of more seats.

In Assam, violence erupted in support of a Karbi Anglong state, with attackson the houses of a Congress MP and MLA, a district party office, and vehicles.

This led to police firing. Agencies have reported that 20 people were injured,leading the administration to impose a curfew and call in the Army. Thedemand for Bodoland has also resurfaced forcefully, with Bodoland TerritorialCouncil chief Hagrama Mohilari announcing a rally in Kokrajhar on August 4.

Even as the east flared up, the debate on the size of, and rationale for, aState as big as Uttar Pradesh took centre stage in Delhi and Lucknow. Theprevious Mayawati government had proposed splitting Uttar Pradesh intoPurvanchal, Bundelkhand, Awadh Pradesh, and Paschi Pradesh, and this wasratified by the Assembly. Union Minister Ajit Singh of the Rashtriya Lok Dalrevived his partys traditional demand for Harit Pradesh. BJP leader UmaBharti pressed for Bundelkhand, while Congress MP Jagdambika Pal saideastern Uttar Pradesh deserved to be a separate State. But the rulingSamajwadi Party is opposed to any division. In the west, the movement forVidarbha got a fillip. Vilas Muttemwar, Congress leader from Nagpur, urgedhis partys leadership to cede the demand. The BJP has reiterated its support

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for Vidarbha on the grounds that it favoured smaller States. The Shiv Senahas however opposed the demand.

Confronting the surge in demands, Congress leader Digvijay Singh said thateach region has to be dealt with separately. The decision on one Statecannot be the reason for giving other regions Statehood.

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Manmohan government to dilute FDI retail norms

Sujay Mehdudia

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Definition of investment in backend infrastructure and 30 per cent sourcingclause may be changed

Yielding to pressure from multinational retail giants and worried at not asingle proposal having come through in the past nine months, the ManmohanSingh-led government is set to dilute various conditions, including effectinga change in the definition of investment in backend infrastructure and the 30per cent sourcing clause, brushing aside opposition from the Micro, Small andMedium Enterprises (MSME) Ministry.

Furthermore, with the Commerce and Industry Ministry at the spearhead, thegovernment proposes to increase the number of cities to be covered underthe policy for 49 per cent FDI in multi-brand retail trade.

This will be done by amending the clause to permit cities or States with lessthan 10 lakh population to allow opening frontend stores. According to aCabinet note, proposed to be put up before the Cabinet Committee onEconomic Affairs on Thursday and accessed by The Hindu , the clauserequiring 30 per cent sourcing from small-scale industries will be scrapped.Under a new policy, medium-scale industries, with a total investment notexceeding $2 million, will be made eligible for sourcing of manufactured/processed products.

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It is argued that the present condition of making those industries thatoutgrow this status ineligible for fulfilment of mandatory local sourcing wouldresult in loss of business for small industries and also discourage retailers

from developing a supply chain. It proposes that this requirement would bereckoned only at the time of first engagement with the retailer and suchindustries will continue to qualify even if they outgrow the investment of $2million during their relationship with the retailer.

However, in its comments on the Cabinet note, the MSME Ministry has said itdoes not favour an open-ended engagement of MSMEs with their retailersunder the provision for 30 per cent procurement even if they outgrow theinvestment limit. The Ministry is of the view that a three-year period from

the day a micro/small/medium enterprise outgrows the investment limit of $2million would provide the required space to equip itself independently tomake supplies to the retailer without being covered under the 30 per centprocurement.

The Ministry supports continuation of engagement of the MSME enterprisewith the retailer for three years from the day it outgrows the investment limitas per the current policy.

This would pave the way for a larger number of MSMEs being covered underthe provision of 30 per cent procurement by retailers in multi-brand retailtrade.

Centre plans to

bring more cities under the policy

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Amendment allows non-Hindu to head Bodh Gaya temple committee

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The Bihar government has amended the Bodh Gaya Temple Act of 1949,allowing for a non-Hindu to head the temple committee.

As per Section 3 (3) of the Act, the district magistrate (DM) is the ex-officiochairman of the temple committee and has to be a Hindu. If the DM is a non-Hindu, the Act requires the government to nominate a Hindu as Chairman of the committee for the period during which the DM is a non-Hindu.

However, on Tuesday, the State Assembly passed the Bodh Gaya Temple(Amendment) Bill 2013. A secular State is the hallmark of the IndianConstitution and the said section goes against the spirit of the Constitution,the proposal to amend the act, said.

Championing the Bill in the Assembly, Chief Minister Nitish Kumar said, theDM is a representative of the governments secular credentials.

The BJP vehemently opposed the Bill as an unnecessary move.

The change invoked mixed responses from the Bodh Gaya TempleManagement Committee (BTMC). We welcome it since ours is a secularState. A mistake has been corrected, an authoritative source told The Hindu.

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In Zimbabwe, a vote that may redefine the nation

ZANU-PF hopes to cash in on the success of its land reforms while MDC is

counting on urban disenchantment The day began early for most Zimbabweans as hundreds lined up at dawn tovote in a hastily-called presidential election that could prove as significant asthe one that heralded independence in 1980.

Since that day, Robert Gabriel Mugabe an 89-year-old liberation hero and his ZANU-PF party have ruled the country with an iron fist. There is no

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other party that has conducted a revolution to redeem the country from thecolonial grip, Mr. Mugabe said in a press conference a day before polls, Itsa peoples party, it is not like other parties.

Yet, this time, Prime Minister Morgan Tsvangirai, Mr. Mugabes rival for more

than a decade, feels that the Movement for Democratic Change (MDC-T) hasa real chance to form a government in Harare. In 2008, Mr. Tsvangirai polledmore votes than Mr. Mugabe, but refused to participate in a run-off aftersecurity forces brutalised his supporters and killed nearly 200 people in theensuing violence. Zimbabwes neighbours convinced the two sides into anuneasy unity government in which the MDC controlled finance, but the ZANU-PF maintained its hold on agriculture, mining and the security sector.

Its the delayed run-off from 2008. It is time to complete the change wealways fought for, Mr. Tsvangirai remarked wryly as he cast his vote at theMt. Pleasant polling centre in a relatively affluent part of Harare. After all the

conflicts, the stalemates, the suspicion, the hostility, I think there is a senseof calmness that Zimbabwe will be able to move forward again.

The run-up to the elections has not been without incident. The MDC wasdenied fair access to the state-run media, much-needed security sectorreforms are still pending, voter rolls are still incomplete and the oppositionselection chief was jailed a few days before elections. Zimbabweansacknowledge that the countrys broken economy desperately needs fixing,but are divided over the best candidate for the task. Mr. Tsvangirai has gainedgreat traction amongst the youth and urban centres, while Mr. Mugabecontinues to control the countryside. Yet, the nation-wide urge for change istempered by the success of ZANU-PFs land reforms, making this a difficultelection to predict.

Ambiguous legacy

At polling stations across Harare, voters said they were tired of the bickeringthat characterised the unity government and hoped that the election wouldgrant one party a clear mandate.

Arguments. They have achieved arguments for four years, said Ameena, a26-year-old from Mbare, a densely populated southern suburb of Harare,

when asked to name a major success of the unity government, If they had apassion for the country, they would have sat down and agreed, it is thenation that is suffering.

From 1998 to 2008, Zimbabwes economy contracted by 45 per cent even asinflation peaked at a mind-boggling 231 million per cent. Industry collapsed,the national currency was replaced by the U.S. dollar and jobs dried up. Whilethe economy has since rebounded, 75 per cent of the population is self-

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employed like Ms. Ameena, who makes fresh chips for a living, selling themfor a dollar a plate.

Mr. Tsvangirai has blamed the ZANU-PFs 33-year tenure for the implosion of the economy, but Ms. Ameenas faith in Mr. Mugabe is intact. My brother

was given a farm in the ZANU-PF land reform, she said, referring to theruling partys signature policy in which land was seized from a small set of white farmers and distributed among 170,000 black families, First he hadfive cows, now he has 35 cows.

Mr. Mugabes land reform initially sent the economy into a tailspin, butindependent studies now confirm that agriculture and livelihoods have beenstrengthened by the move. Mr. Tsvangirais move to dollarise the economyplayed a crucial role, and from 2009-2011 agricultural exports grew by 101per cent according to World Bank.

Hoping for change

At a primary school in the affluent neighbourhood of Borrowdale, votersqueue up outside the polling booth near the tennis court.

Tsvangirai won the elections in 2008 and in 2005, said Alice, a young blackchartered accountant, pointing to widespread allegations of electoral fraudthat were levelled at the ZANU-PF. We are hoping against hope for change.

For now, both parties expect to sweep the polls. Mr. Mugabe has said he feltas confident of winning as he did in 1980. Mr. Tsvangirais representativeshave invited the press to their inauguration party. Despite the fears of violence, voters have been seized by the pageantry of electoral process. Imcleaning my house, said Molene, a 34-year-old seamstress in Mbare, So Ican put on my dress and go vote.

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Interest subsidy hiked to push up exports

Faced with sagging exports and rising trade deficit, the government, onWednesday, raised the rate of interest subsidy for exporters to 3 per cent,and promised to clear pending claims expeditiously, entailing an additional

burden of Rs.2,000 crore to the exchequer.

A number of steps are under way to augment exports. I have offered him(Commerce Minister Anand Sharma) full support and provided, today,additional funds of Rs.2,000 crore. This will include increasing the interestsubvention from 2 per cent to 3 per cent on certain exports, Finance MinisterP. Chidambaram told reporters here.

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Mr. Chidambaram said he had provided Rs.450 crore to meet the additionalexpenses for the remaining part of the current fiscal on account of hiking theinterest subsidy. He also said about Rs.1,550 crore was the last yearsbalance, which would be paid under various incentive programmes.

At present, the interest subvention for exporters, which is a kind of interestsubsidy, is at 2 per cent.

Earlier, Mr. Sharma said all efforts would be made to clear claims of exporters.

The rate of interest subvention from tomorrow, which would be available toexporters, would be enhanced to 3 per cent, Mr. Sharma said adding that theexercise was on to extend this benefit to more sectors.

At present, the benefit is available to sectors such as micro small andmedium enterprises, handlooms, handicraft, carpets, toys, sports goods,processed products, besides certain engineering and textiles items.

The government is making available the required resources to clear allclaims of the exporters from January 1 until now and the provisions are beingmade to ensure that claims of all the exporters are settled forthwith, he said.

The Commerce Ministry, he said, had called a meeting of the Board of Tradeon August 27 to consider more steps to give a boost to exports, hit by globalslowdown.

Indias merchandise exports have declined by 1.4 per cent to $72.46 billion in

the quarter ended June 2013 (April-June, 2013).

The government is also considering raising the Plan allocation for MarketAccess Initiative, Market Development Assistance and Central Assistance toStates for Developing Export Infrastructure and other Allied Activitiesscheme. PTI

===================================================

Bring it back where it belongs

Formidable challenges await Sujatha Singh as she takes over as ForeignSecretary. The most difficult of these is to restore to the Foreign Office itsplace of primacy in the formulation and execution of Indias foreign policy.Since many years the perception has grown stronger by the year in thecountrys foreign policy establishment as well as among Indias interlocutorsthat the foreign offices contribution to critical foreign policy decisions hasbeen substantially eroded.

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Many Ministries are seeking to pursue virtually independent externalinitiatives and, in doing so, are cutting into the foreign offices domain. Othergovernment institutions, especially the office of the National Security Advisor,are coming to occupy a place of pre-eminence on core foreign policy issues.

This has affected the morale and lan of the Indian Foreign Service not just atthe middle and senior levels, but even among junior officers, who are worriedabout the future relevance of the foreign office.

Time to adapt

It can be no ones case that the foreign office is or can ever be the repositoryof all information, expertise and wisdom through the full range of Indiasinternational interaction. This is especially so as issues have become morecomplex and multidimensional and as Indias interests have expanded ingeographical reach and become more intense on matters of global andregional significance.

However, the imperative of coherence in policy formulation, implementationand articulation requires that the foreign office does not remain a bystanderto external initiatives and actions of various agencies of state but weavesthem into an integrated whole to optimise national interest.

Sadly, this is happening less and less. The latest example is the Bhutansubsidy case where the Indian Oil Corporation seems to have informed theBhutanese side without a final clearance from the foreign office that a changein the oil and gas supplies regime will be made. The India-Bhutan relationshipis crucial to Indias national interest, including our security concerns, andsuch action can cause long-term damage.

If the foreign office is to effectively perform its mandated functions, it has toinspire confidence and respect in other organs of state that it has theexpertise to do so. For this purpose it has to look within to impart a greaterdegree of area and issues specialisation to Indian diplomats and also optimisehuman resource utilisation at its senior-most levels.

Some initiatives have been taken in the past few years. The intake of officershas been heavily increased to address manpower shortages. There is agreater emphasis on in-house training. A Public Diplomacy Division has beenset up to coordinate the projection of Indias soft power. A DevelopmentPartnership Administration (DPA) has been established to coordinate andexecute Indias assistance programmes.

Pool of experience

More has to be done. One priority area is to make maximum use of the poolof experience available at the Secretary level in the foreign office through a

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State when a unified Andhra Pradesh was created in 1956. What followed,unfortunately, was a saga of unkept promises, violation of the GentlemensAgreement of 1956, and two violent agitations in 1969 and 1972. Slowly, afeeling built up among the people of Telangana that they were beingdiscriminated against in employment and education.

These wrongs will hopefully be set right when Telangana begins its tryst withdestiny soon. Without much ado, the Congress has cut the Gordian knot thatwas Hyderabads status by deciding to make it the common capital of

Telangana and Andhra Pradesh, for a period of 10 years. Seemandhra willreceive Central assistance for building a new capital, and the classification of Polavaram a massive multipurpose irrigation venture as a nationalproject will help protect the rump Andhra Pradeshs interests. What is asource of worry, however, is that the CWC resolution leaves slightly open-ended the question of whether Telangana will have 10 districts or 12, with theaddition of Kurnool and Anantapur in Rayalaseema. There will be otherpractical difficulties too but the political and civil society leadership of

Telangana and Andhra Pradesh must shun regional chauvinism and violenceand grasp with both hands the great future that lies ahead of them. If theCongress has opened a Pandoras box by giving an impetus to similardemands for statehood in Gorkhaland, Bodoland and elsewhere, the partymust draw lessons from its chequered handling of the Telangana question.Instead of finding ad hoc solutions to crises as and when they erupt, seriousthought must be given to the creation of a second States ReorganisationCommission that will take a structural approach to the problem

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Manning verdict could intimidate whistleblowers, feel rights activists

Bradley Manning faces a sentence of up to 130 years in prison and civil rightsgroups accuse the U.S. government of seeking to intimidate futurewhistleblowers

Civil rights groups have accused the United States government of seeking to

intimidate future whistleblowers after Army private Bradley Manning was on Tuesday convicted by a military court of most of the charges against him forpassing the biggest cache of state secrets in history to WikiLeaks.

Although he was found not guilty of the most serious charge, aiding theenemy, Manning faces a sentence of up to 130 years in prison for severalviolations of the Espionage Act.

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Col. Lind also accepted Mannings version of several of the key dates in theWikiLeaks disclosures, and took some of the edge from other less seriouscharges.

But the overriding toughness of the verdict remains: the soldier was found

guilty in their entirety of 17 out of the 22 counts against him, and of anamended version of four others.

That guilty ruling could still have wide ramifications for news organisationsworking on investigations relating to U.S. national security.Once the countsare added up, the prospects for Manning are bleak.

Barring reduction of sentence for mitigation, which becomes the subject of another mini-trial dedicated to sentencing that starts on Wednesday,Manning will face a substantial chunk of his adult life in military custody.

Among those who will also be closely analysing the verdict are EdwardSnowden, the former NSA contractor who has disclosed the existence of secret government dragnets of the phone records of millions of Americans,who has indicated that the treatment of Manning was one reason for hisdecision to seek asylum in another country rather than face similaraggressive prosecution in America.

Another party that will be intimately engaged with the verdict is WikiLeaks,and its founder, Julian Assange. They have been the subject of a secret grand

jury investigation in Virginia that has been looking into whether to prosecutethem for their role in the Manning disclosures. Guardian News & Media2013

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FM talks up the market, hints at more steps to contain CAD

Finance Minister P. Chidambaram, on Wednesday, said that the governmentwould further liberalise the foreign direct investment policy in the comingweeks.

Addressing a press conference here , Mr. Chidambaram also said that somemore steps were in the offing to contain the widening current account deficit(CAD). We expect that we will be able to fully finance the CAD this year too,and we will not be obliged to draw down on reserves. This year, I promise wewill tackle both (fiscal and revenue) deficits. The target for fiscal deficit is 4.8per cent of gross domestic product (GDP). It is a red line, and it will not bebreached under any circumstances, he added.

The other steps being considered by the government to deal with the CADinclude relaxing the external commercial borrowing (ECB) norms, attractinginvestments from sovereign wealth and pension funds, and NRI deposits.Responding to questions on the falling rupee, the Finance Minister said

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though he did not have any fixed target in mind, he would endeavour tocheck volatility and end speculative trades in the domestic currency.

Import duty

He said the government was also looking at raising import duty on non-

essential luxury items and promoting exports to contain CAD, which hadsoared to a high of 4.8 per cent of the GDP last fiscal. Finance Ministryofficials were preparing a list of non-essential goods with a view to limitingtheir inward shipments. Electronic hardware can be manufactured in stateslike Rajasthan and Kerala, he said.

Mr. Chidambaram was confident that the economy would record a growthrate of 5.5 to 6 per cent in the current fiscal, up from 5 per cent a year ago. Iam confident that we will take the Indian economy one rung higher in 2013-14. We are looking forward to a growth rate between 5.5-6 per cent, and wewill take all measures to achieve that goal, he said.

Investor sentiment

Underlining the need to revive investor sentiment, he said that the industrymust play its part. Industrial houses appear to be confident when theydecide to invest abroad. The same confidence must be exhibited in order toinvest in India.

The price of credit is indeed high, but it is not so dauntingly high that itshould hold back investment, he said.

He further said that even without the additional measures, inflows would bewell above $80 billion, enough to comfortably finance the CAD.

Gold imports The government took some strong measures to contain the import of gold. In June, it was down to 31 million tonnes but went up to 45 million tonnes in July.However, gold import in June and July in the current fiscal were less thanwhat was recorded in corresponding months last year. We hope to containgold imports at a level well below last year's total imports of 845 milliontonnes, and save a considerable amount of foreign exchange which will havea positive impact on CAD, he added.

Asked if the government had any specific value of rupee in mind, Mr.Chidambaram said: We do not target any specific value of rupee, but wecertainly do not countenance speculative transactions on the rupee,especially in the overseas market. Therefore, in last two weeks, Reserve Bankof India (RBI), in consultation with the government, had taken a number of measures to stabilise the rupee. We need to stabilise the rupee, and, goingforward, take steps to promote growth. The rupee depreciation of June-Julywas unexpected, he said.

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Crude storage cavern at Mangalore to be ready by mid-2014

Renuka Phadnis

The underground caverns to store crude oil as a strategic reserve, being builtby Indian Strategic Petroleum Reserves Ltd. (ISPRL) at Mangalore and Padur

(Udupi), will be ready by June next.We are hopeful to commission the projects by the middle of next year,Rajan K. Pillai, Chief Executive Officer, ISPRL, told The Hindu over phone fromNew Delhi.

In Mangalore, out of 22.6 lakh metre cube of cavern, close to 22 lakh metrecube was completed. Within the next two months, the rest will becompleted, he said.

P. V. B. Rao, Deputy General Manager, (DGM), ISPRL, Padur, said the cavernat Padur is going on well.

While it would be ready by the targeted time January, 2014 commissioning would be possible within three months. We will be on track,he said.

ISPRL is a special purpose vehicle (SPV), wholly-owned by the Oil IndustryDevelopment Board (OIDB), constructing three caverns at Mangalore, Padurand Vizag for storage of oil for emergencies and disruption of supplies due towar or uncontrolled prices.

A few weeks ago, S. Vijayananda, Chief Manager, ISPRL, Mangalore, had told The Hindu that the completion of the Mangalore cavern project would getpostponed by six months from 2013 due to a delay in laying a 36-km pipeline

from the New Mangalore Port to the ISPRL crude filling pipe. The pipeline hadnow been put on the fast track, he said.

Mr. Pillai said, We are moving already on fast track. It is expected to be doneshortly, within a month. The pipes had been procured, and had to be laid.However, the order for laying the pipeline was yet to be placed, he said.

Mr. Vijayanand, however, said, Delay in pipeline is still there as the contractshould have been awarded in March, 2013. The work normally should be donein fair season, which ideally is October to December, and can extend to mid-May. While the completed work may be commissioned (the crude can bebrought into the cavern) any time, the rains do affect pipeline work. If thepipeline work starts in August, no pipeline contractor will work in monsoonsas quality welding is not possible. So, the work will be mobilised only inOctober. It is still a setback, he said.

The Mangalore cavern could store the countrys requirement for 15 days, hesaid.

Mr. Pillai said monsoon in the coastal region was a factor to be considered,but the project would not be affected by it. Work prior to laying the pipelinecould begin, he said.

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It can store the countrys requirement of oil for 15 days during emergencies

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New norms to determine tariffs at major ports

G. K. Vasan

The long wait to permit competitive market forces to have a larger role indetermining tariffs at major ports in India ended on Wednesday, with thegovernment announcing new guidelines for the same.

The new guidelines for determining Tariff for Projects at Major Ports (TAMP)comes into force with immediate effect, and will apply prospectively i.e. forall new projects cleared from Wednesday.

We hope to attract more investment and cargo traffic. Although there is ahealthy competition, there is no level-playing field, G.K. Vasan, Union

Minister for Shipping, told a press conference here on Wednesday. TAMP is only required for major ports, while non-major ports can chargemarket-based tariffs. While TAMP was established in 1997, major ports todayaccount for 58 per cent of the countrys traffic while non-major ports accountfor the rest .

Besides providing for tariffs to be indexed to inflation, the new guidelines setout performance standards for port projects to improve accountability andensure improved quality of service. The guidelines will be fixed on the basisof market conditions subject to ceilings. The focus on TAMP will now graduallyshift to performance monitoring and redressing grievances, Mr. Vasan said.

Milind Deora, Minister of State for Shipping, IT and Communications, said,the maritime sector has been going through difficult times and it is animportant move to increase investments in such a critical sector.

The biggest concern for India has been how to increase port capacity inmajor ports owned by the government and how to increase throughput. Thereform in TAMP was long overdue and it is a win-win for the government andmajor ports to increase revenues and a win-win for private port operatorsIndian or foreignto increase port capacity.

The first set of TAMP guidelines was issued in 2005, and revised guidelineswere announced in 2008.

Last year, 32 projects were awarded, which will bring in an investment of Rs.6,765 crore to add 136 million tonnes per annum (tpa). In the current year,the shipping ministry is targeting the award of 30 port projects to add 288million tpa at an estimated investment of Rs. 25,000 crore.

The guidelines are for projects announced from today, and we will examineretrospective projects cleared under earlier TAMP guidelines at a later date,Mr. Deora said.

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From the granary to the plate

Jean Drze

Despite its many flaws, the food security bill is an opportunity to end theleakages from the PDSand prevent wastage of public resources

The National Food Security Bill, now an ordinance, has been a target of sustained attacks in the business media in recent weeks. There is nothingwrong, of course, in being critical of the bill, or even opposed to it. Indeed,the bill has many flaws. What is a little troubling, however, is the shrill and ill-informed nature of many of these attacks. Statistical hocus-pocus has beendeployed with abandon to produce wildly exaggerated estimates of thefinancial costs of the bill, and no expression seems to be too strong todisparage it. The fact that the food bill could bring some relief in the lives of millions of people who live in conditions of terrifying insecurity seems tocount for very little.

Findings

Meanwhile, recent studies shed some useful light on the state of IndiasPublic Distribution System (PDS) one of the controversial foundations of the bill. As far as the below poverty line (BPL) quota is concerned, there is aclear trend of steady improvement in many States, including some that had avery poor PDS not so long ago. A recent study of the PDS in Koraput, one of Odishas poorest districts, found that almost all BPL households werereceiving their full monthly quota of 25 kg of rice at the stipulated price.Similar findings emerged from a survey of the PDS in two districts of Uttar

Pradesh (Lakhimpur Kheri and Chitrakoot), where most BPL households weregetting their due 35 kg of rice or wheat per month. The main problem wasthe restrictive nature of the BPL list, which left many households excluded.

These surveys confirm earlier findings of a study by the Indian Institute of Technology in 2011 that BPL households in nine sample States received 84per cent of their PDS entitlements.

It is in the above poverty line (APL) quota that embezzlement continues inmany States. In Uttar Pradesh (U.P.), APL households are supposed to get 10kg of wheat per month, but most of the APL quota goes straight to the blackmarket. The gravy flows all the way to the top: the complicity of the thenFood Minister, Raja Bhaiya, in this scam was exposed last year by Tehelka ,

but the bhaiya retained his post. Recent investigations suggest thatleakages in the APL quota are also very high in Bihar, Jharkhand, and MadhyaPradesh, among other prime offenders.

The main reason for this vulnerability is that the APL quota is treated as adumping ground for excess foodgrain stocks. In recent years, foodgrainprocurement has increased by leaps and bounds, but distribution under theBPL and Antyodaya quotas has remained much the same, since allocationsare fixed and lifting is close to 100 per cent. To moderate the accumulation of

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(e.g. 5 kg of foodgrains per person per month) across the country, asopposed to household entitlements (e.g. 25 kg per household). Per capitaentitlements are certainly more equitable and logical than householdentitlements. But the transition from the latter to the former is not a simplematter, and could be very disruptive if it is imposed overnight from the top.

Just think about how an old widow in Rajasthan, who lives alone and surviveson her monthly quota of 25 kg of PDS rice, would feel on being told that herentitlement is being slashed to 5 kg per month.

Political tool

The second danger is excessive haste. As the country gears up for a string of elections, the Central government and some State governments arekeen to fast track the roll-out of the bill for electoral purposes. A sense of urgency is certainly appropriate as far as food security is concerned, butundue haste could be very counterproductive. For instance, some Stategovernments apparently propose to use the BPL Census of 2002 to identifyeligible households, instead of the more recent and reliable Socio-Economic

and Caste Census just to speed things up. This is a disastrous idea. Abetter way of fast tracking the roll-out of the bill would be to universalise thePDS in the countrys poorest districts or blocks.

Last but not least, the promulgation of an ordinance has turned the bill into apolitical football. The Congress claims that the bill is a non-partisan initiative,but is also trying to use it as an electoral card. The Bharatiya Janata Partysays in the same breath that it supports the bill and that it will not allowParliament to function. The Samajwadi Party is shedding crocodile tears forfarmers, but is unable to explain why the bill is anti-farmer. The All IndiaAnna Dravida Munnetra Kazhagam claims that the bill is against Tamil Nadusinterests, without mentioning that it will enable the Tamil Nadu government

to save large amounts of money on rice purchases from the Centre. The realissues are getting lost in these squabbles.

It remains to be seen whether the monsoon session of Parliament will providean opportunity to repair this damage, and also to consider the much-neededamendments to the bill. The silver lining is that food security has finallybecome a lively focus of democratic politics in India. Whatever happens tothe bill, State governments are under great pressure to reform their PDS andmake it work for people rather than for corrupt middlemen and their politicalmasters. This was long overdue.

(Jean Drze is visiting professor at the Department of Economics, Universityof Allahabad.)