Central Ordinance to Boost Food Welfare in India

Individual Assignment 2

SUBHANKAR BARIK B12056 SEC - A

XLRI BUSINESS MANAGEMENT

Question 1:-Study the history of Food welfare in India, and assess the current Bill against this timeline. Study its legal, economic, psychological and sociological implications for the poor, the rural farmers, and the general food grain markets of India, neighbouring countries, and of the world. Is welfare economics good for India in the long run? Does it breed entitlement rights and failure of duty to be self-sufficient? Past Food Welfare Current Food Welfare India has given significant subsidy for food & kerosene in the past also. A data of 2005 suggest that around 14% of The current bill is a significant investment in the food GDP is constituted by Subsidy. The amount of Money the subsidy region because the price of most of the food government is planning to spend in the future will be grains is reduced by a significant amount significant. This is the first time the government has designed such All the previous food welfares were developed in the a heavyweight investment in food just before election middle of the tenure. Poor Rural Farmers General Food Grain Markets The black market development in the general market could make things tough Neighbouring Country World There is not expected to be any legal issues for the different parts of the world. But global impact is expected because of really high population The overall demand for food in the world is expected to increases because of the initiative in India. Other countries also expected to follow the footsteps of India

Parameters

Legal

There can be people who will buy the product as a poor person and might sale the product at high price in the market

Rural farmers may be forced to develop lots of crops in the small time period

There can be issues regarding import & export with neighbouring countries

Economic

Poor people will benefit economically because of the reduced cost of the food. They can save more than before and because of the increased saving the economic development is expected to be high Poor people will have psychologically positive view regarding this

Rural Farmers will get incentive to produce more food product.

The massive subsidy could lead to the start of a Black market. This would led to some problem in general market

In order to meet the increased demand due to low prices food import is expected from neighbouring country

People may not like the new The neighbouring The world will love Rural farmers will feel welfare because country will like the subsidy because good about the current Psychological of the the current of lots of BPL change in the system significant price initiative people difference There wont be The social Due to increased The neighbouring The overall social any sociological development is incentive to work the country might get development is impact on the Sociological expected in the poor social development is more profit due to expected in the general food people community expected increased demand world markets Long Run Expectation:- The entire welfare system is not good for India in the long run because with increase in the amount of spending the government will find it difficult to fund all these extra spending. The government should expect the budget deficit in the future to increase by significant amount. Increase in budget deficit the country may face problem because of increased in amount of debt. The bond rating of the country may go down in the future.

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Entitlement Rights Failure of Duty The entitlement theory suggests that each person has a basic right The failure to duty is not a self-sufficient activity. If one to economic benefits and common thing offered to people. community gets all the benefits and doesnt work then it may Because of the benefit generated by the welfare from the put pressure on the other people. And these people may have government the economy is expected to be self- sufficient but in to work more in order to compensate for the losses. This will the long the situation may change due to the influence of various create imbalance in the society factors Question 2:- Study the Bill from a teleological perspective of costs and benefits to the largest number in India. How do you assess it present and future costs and benefits for various stakeholders. Hence, is the Bill ethical based on teleological grounds and why? Stakeholder People who gets Benefits Cost The food subsidy may make the people who gets this benefits to work less and this can hamper the overall economic growth of the country Sometime people get the subsidy and sell the product at a higher price in the market. This kinds of activity actually hampers the purpose of subsidy and make the demand and supply variation difficult People who doesnt get benefit may not like the plan of the government and they may end up not paying up taxes as a regular basis People usually buy stuffs from the black market which increases the burden on the society and also on the society People who doesnt like the current policy may hate the current political party which implemented the same and this may create problem in the future For the government the opportunity cost is really high because the same amount of money cant be invested in other development related work like education, health and other benefits The budget constraint may affect the decision of government of future growth. In case of a budget constraint all the spending decisions are expected to be trade-offs Government may investment a lot of money in the distribution of the subsidy. In the distribution process it is expected that some people wont get proper benefit because the benefits cant be reached to these people in time and in terms of location Economy generate very less surplus because most of the products are sold at a very low cost Subsidy that are designed for a certain sector usually divert resources from one sector to other sector and this actually create imbalance in the society Subsidy has a transitional gain path where the immediate people actually gets benefits from the subsidy and the other people may face difficulty and even end up paying more amount. Benefits People get economic & social benefits due to subsidy. The savings of the people increases which increases consumption and development of the economy People in this segments actually face no benefits and they face a lot of problems due to the policy of the government which actually put them in a difficult situation Political party get votes from the poor people who actually constitute the majority The government may get benefits because they will win the trust of the people for whom the benefit is entitled. The government can at the same time impose huge amount of tax and other tariffs in order to raise money for funding the subsidy The economy is developed in the sector where most subsidies is provided but the other sectors there wont be any benefits and only cost is expected for other sectors.

People who doesnt get Benefits

Political Party

Government

Economy

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Based on the overall analysis and future prediction it is expected that in the future also things will be difficult because of the increased amount of year by year debt due to the huge subsidy amount. The current government seems to be using the same strategy for winning the votes. Based on the teleological principle it is expected that the cost is more than the benefits to the society. The future cost of the government will only increase. Instead of this Government should think how they can improve the development across the entire sector in the economy. Based on this it is not advisable to implement such a huge food welfare. Question 3 Study the Bill from a deontological perspective of rights and duties of the largest number in India. How do you assess it present and future fulfilment of rights and duties in relation to various stakeholders. Hence, is the Bill ethical based on deontological grounds and why? Stakeholders Rights Responsibility Every people have the rights to get the Even if the people in this category are poor basic need for human that is food, clothes they have a responsibility towards the and shelter. country. Every person in the county should India around 70% of the people struggle work together in order to improve the to earn 120rs per day this actually makes economy of the country. The poor people who life impossible for these people. are using the benefits of the subsidy should People who gets the Benefits use the subsidy and at the same time try to save the leftover money. Since the basic need is accomplished they should concentrate more on getting work instead of just using the benefits of the government People who dont get these benefits The responsibility of people in this segment is actually are the people who earn to make timely tax payments. These tax significant amount of money. But the payments will be helpful in generating people who just live at the cut off edge of revenue for future development of the People who doesnt get the government policy may face problem country. These people should help the because they wont be able to get the government in implementing the policies so Benefits benefits. People living in these segment that the overall growth of the economy can be has the right to enjoy the benefits by achieved government in terms of electricity, roads & better infrastructure facility The political party has the right of The political parties have the responsibility to developing and implementing the give tickets to the eligible candidates and different policy for the country and for the these people should make proper policies for people The political party has the right to the benefits of the people. Political party enjoy the benefits of being the policy shouldnt make any decision just for the sake Political Party makers for the country of winning election or getting votes. Political party if they are not there in the critical position should try their best to make sure they support the government if the policy is for the benefits of the people The government has the right to enjoy the In India there are different kinds of people authority. The have the right to design the staying in the country. It is very difficult for policies for the country both in terms of the government to satisfy all kinds of people the economy and in terms of the society at the same time. The policy of the government should be made such a way that Government benefit should be there to the economy and at the same time the benefit to a segment shouldnt be there if there is significant amount of cost to other segment.

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The government has the rights & responsibility to develop policy for the benefits of the people but the most important point is if the government is giving certain benefit to certain kinds of people but not to other kinds of people this may create problem in the economy. The government should be responsible in treating everyone equally and at the same time giving benefits to everyone so that overall progress in the economy can be achieved. According to deontological principle the bill should not be passed because this is not for everybody Question 4 Study the Bill from a distributive justice perspective of an equitable distribution of its costs and benefits, rights and duties relative to the largest number in India. How do you assess the cost/benefits, rights/duties fulfilment profile currently and in the near future in relation to various stakeholders. Hence, is the Bill ethical based on the principles of distributive justice and why? Which Canons of distributive justice does it uphold, and which does it challenge, and why? Stakeholders Current Egalitarianism- The poor people have the equal rights of accessing goods of life that every rational person have. Since India is an emerging country Utilitarianism- The people who doesnt get the benefit of the food welfare program by government are people who are well placed economically compared to other people. The government should think in terms of satisfying the need of these people. Fair Opportunism- The political party who are in charge of the government should not be granted social benefits based on status. These people should be treated equally. The policy should reflect their intention of serving the people equally. They shouldnt influence the policy based on their power and at the same time shouldnt oppose the policy of the government if it works against them Well-being by Due Care The act of government should serve the wellbeing of all the people. The government should carefully employ standards of due care. The government should analyse the risk and benefits of all the policy and based on that the decision should be taken. They just cant act in favour of one party and at the same time make things tough for the other people Near Future The need for these people will only increase in the future compared to the need of these people now. The increased need of these people will definitely be an important factor in designing the policy for next year The future scenario will be similar but with growing economy there will be lots of people who will move out of poverty to economically stable situation. Because of these the need of the people will increase and in order to satisfy the increased need strong policy should be placed In future the political party should think more about the people rather than the votes. The political party should think about the long term benefit of the entire nation not on the short term benefits of their own party. The should chose real leaders to contest in the election

People who gets benefits

People who doesnt get benefits

Political Party

Government

Distributive Justice The government has to justify their act. What society chooses to do for one may be a function of what one chooses to do for society. In the future the distributive justice will be served if the government is able to distribute the goods equally among everyone & justice states that a distribution is just if all are entitled to the holdings they possess under a given distribution. The government should treat all the people equally and they should do so for the benefit of all the people. They cant be selfish in this regard and they should think about the country and its people.

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Based on the distributive justice we conclude that the food bills should be passed for the benefit of people who struggles to get their need getting fulfilled. It is very critical that government develop the policy such that everyone is benefitted by the policy and it shouldnt be like that only one type of people is benefitted by the policy. The food welfare should be there and at the same time government should take initiative in order to develop the policy for other people who are not entitled to get benefits. If they do so then the food bill should be passed in the parliament. The government should check the implementation of the welfare plan properly so that this can reach to most of the people. Question 5 Study the Bill from a corrective justice perspective. That is, regardless of its costs and benefits, rights and duties fulfilled of the largest number in India, is the Bill correcting an unjust distribution system prevalent in India, especially in relation to basic food amenities? How do you assess it present and future costs and benefits for various stakeholders. Hence, is the Bill ethical based corrective justice grounds and why? Stakeholders Present If the people get the food welfare from the government then they will be satisfied. But this will lead to increased greed among the people and due to this transaction these people will have the advantage because they can buy the food at a very low cost and they can sell the same amount of food at the normal cost to other people. By doing this people in this category will generate profits from the transaction. This will completely imbalance the economy to a significant extent and some people even if they have sufficient income to afford the rice might use fake certificate to proof that are in need of the food The food welfare will put the people who dont get benefit in a bad situation since there is a definite probability of the development of the black market. The people who dont get the benefit will try to get the food from the black market. This will again makes things difficult for the current market. Apart from these people will be at dissatisfied stage because these people will be worse off significantly. The political party will be at a better situation because of the transaction because people in this category considers maximum percentage of the voters and winning their consensus the political party will have nice chance of winning the election next time. The government will benefit from the transaction specially if there is election which is very near. The voters which Future In future these kinds of activity is expected to increase and this will lead to an difficult situation for the country. The very reason why the subsidy was implemented wont be served if these kinds of activity continue in the future. We have seen the evidence of this before also where there is a development of black market which buys the product at very low price and sell the same to the people in need at a significantly higher price. Because of the vastness of the country it will be difficult to regulate the activity of everyone

People who gets the benefit

People who dont get the benefit

In the future it is expected that people will try to complain against the injustice they are facing because of the grant of the food bill. These people are expected to be in trouble because government will cut the public infrastructure & other benefits in order to deal with the increased cost of food welfare. These people are also expected to pay significant amount of money for tax purposes In the future similar activity is expected from the political party and this will actually makes things tough for the economy. The transaction will be in complete favour of the political party and the party should try hard to get as much benefits as possible from these The government is expected to be refrain from activity which is only meant for impressing people in order to build a better

Political Party

Government

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constitute most of the beneficiaries of welfare will think that government is doing a great job

image among people. They should make policy which will benefit the people as a whole not the ruling government

Based on doing the analysis on the corrective justice I came to a conclusion that many people will be at a disadvantage if they implement this. The transactional injustice will be significant if the food welfare is implemented in the near future. So I feel that this should not be implemented in the future. Question 6 Do you approve this bill based on Virtue Ethics, especially the virtues of prudence, justice, and compassion? (See Chapter 05). Virtue Ethics Decision The virtue of prudence stress upon the point that virtue of prudence can be practised by anyone. The prudence is based on the practical application of moral principle. The most important thing is to judge based on the evidence at hand and take decision. From the issue we figured out that only one class of the society will be helpful because of this decision and other class of the society might face problem because of this. The government should think about all the classes in the society before making any decision. The government cant make any decision in an isolated way because this will influence the future of our country in a significant way. So in order to develop the country the government should calculate the cost and benefit of the implementation of food welfare. Based on the analysis the government should decide the outcome. The government should be futuristic in this case and it should take into account all the intangible and tangible cost before making any decision. From the point of view of Prudence I feel this should not be implemented at all because the cost is far higher than the benefit to the society The justice virtue is the medium between selfishness and selflessness. We have seen that due to implementation of the food welfare system there will be people who will use this as there benefit. The selfish people will use the subsidy to buy the product at a very low cost and they will sell it at a high cost. The same thing is expected for people who will not get the benefit. It is expected that these people will pay less tax than the other people because these people wont like the subsidy policy of the government because they feel that their tax should be used for the benefit of themselves no the benefit of other. Now government is behaving as a selfless creature by donating significant amount of money to people as food welfare. But from analysing the history of the country it is expected that all the policies are implemented in the middle of the tenure not at the end. The selfless people like those who wish to donate for the benefit of the country may find it difficult in order make the proper use of the donation because of the increasing risk of corruption to the country. From the justice point of view the policy regarding the implementation of the food welfare actually come to the extreme sides of our analysis. Since justice is something which is placed in the middle not In the extreme it is expected that from the point of view of justice this cant be implemented Compassion is the understanding for the sufferings of others. In India there are lots of people who live in below poverty line and that number is significant. These people dont even manage to earn Rs 40 per day. This makes life very difficult for these people because they can hardly eat something with these kinds of earnings. India is an emerging country having a significant growth potential. So the people should try to make sure the people in the below poverty line category should be lifted in order for the economy to start growing. We just cant neglect these people. The government should implement the food welfare and it should distribute the food welfare among the people in a most fair way so that everyone gets benefit of the distribution of the food welfare. The government should try to reduce the middle man so that the corruption will be less in distributing the welfare to poor people and at the same time government should be cautious that there shouldnt be any black market development because of the increase in the amount of subsidy provided to people.

Prudence

Justice

Compassion

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REFERENCES
India sets in motion the worlds biggest food subsidy program o Betwa Sharma Chapter 2: The effects of subsidies o Subsidy primer Cheap Food Plan Could Cost India Dearly o By Anant Vijay Kala and Mukesh Jagota WTO to discuss Indias proposal to hike food subsidy limits Deontological Ethics Britannica 16 biggest problems facing the Indian economy BREAKINGVIEWS - India grain subsidy may only outsource hunger o By Andy Mukherjee What Food Security Bill means for India's subsidy burden o By Dhanraj Bhagat RBI Database Principle of Distributive Justice How to implement Corrective Justice Corrective Justice in a Nutshell Virtue Ethics A Basic Introductory Essay, by Dr. Garrett Virtue ethics BBC Virtue ethics Internet encyclopedia Virtue Ethics o First published Fri Jul 18, 2003; substantive revision Thu Mar 8, 2012 Prudence: A Cardinal Virtue By Scott P. Richert, Virtue of Justice DOUG MCMANAMAN The Virtue of Compassion DONALD DEMARCO

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