PERSPECTIVES
Achilles’ Heel of Public Policy
Information and Limited
Institutions Capacity
M H Suryanarayana
An inadequate information base
and limited institutional capacity
for policy formulation seem to be
important factors constraining
India’s public policy pursuits.
A look at the major
recommendations of the Report
of the High Level Committee on
Reorienting the Role and
Restructuring of Food
Corporation of India illustrates
that this has not changed in more
than six decades of independence.
Though a good understanding of
the issue is essential for any
policy formulation to be effective,
an evaluation shows that there
are good reasons to be sceptical
about the committee’s
comprehension of issues, methods
and interpretations.
This paper was presented at the two-day
conference on “Papers in Public Economics
and Policy,” National Institute of Public
Finance and Policy, New Delhi, 12–13 March
2015. The author thanks C S C Sekhar,
B N Goldar and Sugata Marjit for their
comments.
M H Suryanarayana (surya.igidr@gmail.com)
is with the Indira Gandhi Institute of
Development Research, Mumbai.
44
T
he term “public economics” deals
with government policy formula-
tion and its evaluation in terms of
economic efficiency and equity criteria.
And “public policy” refers to a set of
decisions and programmes undertaken
by the government to address certain
issues of public concern. Effective public
policy formulation and implementation
calls for (i) a sound information base
and its appreciation; (ii) comprehensive
understanding of the issue under review
and its clear specification in terms of
well-formulated concepts to enable iden-
tification of policy options and targets;
(iii) policy choice; (iv) policy design;
(v) policy implementation and monitor-
ing; and (vi) policy evaluation (Young
and Quinn 2002). If one starts evaluat-
ing policymaking in India with respect
to these dimensions, one would be in for
a big surprise right from the basics. An
inadequate information base, its limited
appreciation and weak fundamentals
due to selective choice and understand-
ing of concepts, measures and methods
are a major Achilles’ heel of policy for-
mulation, and hence a serious constraint
on public economics in India.
Some examples follow. We have had
countless debates on poverty and poli-
cies on poverty and food insecurity, but
we do not have unbiased estimates of
income/consumption distribution para-
meters even now. We formulated and
eulogised the virtues of the Sixth Five
Year Plan (1980–85) for “growth with
redistribution” without any information
base for estimates of the extent of ine-
quality and deprivation in the base year
of the plan (GoI 1981a). The same plan
authenticated its choice of redistributive
strategy by citing its finding on a trend
reduction in the extent of inequality. In
july 25, 2015
the process, it did not even realise that
its estimates of the extent of inequality
based on household size distribution of
consumption are subject to a grouping
bias involving underestimation of the
extent of inequality and rendering them
non-comparable. We have formulated
two successive five-year plans for “inclu-
sive growth” without a concept, measure
and estimate (GoI 2006, 2013a). So is the
case with our National Food Security
Act (NFSA), 2013 (GoI 2013b; Surya-
narayana 2013). We have an annual Eco-
nomic Survey, which does not distin-
guish between (i) “average annual
growth rate” and “growth rate in aver-
age annual;” and (ii) “average annual
decline” and “annual average decline”
(GoI 2013c). It finally presents findings
on “annual average human development.”
One could cite such examples of using
jargon without any real sense ad infini-
tum.1 It is this kind of policymaking that
has become the Achilles’ heel of Indian
public policies since independence.2
This article seeks to show that the cur-
rent government at the centre is no dif-
ferent. It provides an illustration with
reference to the Report of the High Level
Committee on Reorienting the Role and
Restructuring of Food Corporation of
India (GoI 2015), which was submitted
on 22 January 2015 to the central gov-
ernment. The article is organised as fol-
lows. Section 1 summarises the terms of
reference and salient recommendations
of the high-level committee (HLC). Sec-
tion 2 provides an evaluation of the
major recommendations and Section 3
concludes the paper.
1 High Level Committee’s
Recommendations
The HLC was set up by the Government
of India in August 2014 under the chair-
manship of Shanta Kumar, former union
minister of consumer affairs and public
distribution (1999–2002) and rural
development (2002–04). It was entrust-
ed with the tasks of reviewing the opera-
tion of the Food Corporation of India
(FCI) and recommending options to pro-
mote its efficiency in providing a minimum
support price (MSP), procuring, storing,
vol l no 30 EPW Economic & Political Weekly

and distributing grains in the targeted
public distribution system (TPDS) (GoI
2015: ii).3
The committee appreciates the factors
that warranted the setting up of the FCI
in the mid-1960s and its specific objec-
tives—(i) providing effective price sup-
port to farmers; (ii) facilitating procure-
ment and distribution of foodgrains to
vulnerable sections; and (iii) maintain-
ing foodgrain buffer stocks to ensure
stability in prices.
However, the HLC feels that the coun-
try has moved away from the era of
shortages to one of surpluses. There is a
need to review the role and functions of
the FCI for the following reasons.
(i) As per the National Sample Survey
(NSS) estimates for 2012–13, the propor-
tion of farmers selling paddy and wheat
to any public procurement agency is
only about 6%.
(ii) Estimates based on foodgrain
offtake from the central pool and the
NSS information on consumption from
the PDS during 2011–12 show leakages
from the PDS to be as high as 46.7%.
(iii) The country had bounteous stocks
of foodgrains much above the norm
even after exporting 42 million tonnes
of cereals during 2012–13 and 2013–14
(combined), which meant unproductive
expenditure. Hence, the HLC concluded
that the food management system,
including the FCI, has failed to fulfil its
objectives in an efficient manner (GoI
2015: iv).
Given this status report, the HLC rec-
ognises the need to ensure the benefits
of foodgrain procurement to a larger
number of farmers, reorient the PDS to
benefit the poor vulnerable sections,
and to promote the efficiency and cost
effectiveness of the foodgrain manage-
ment system to stabilise prices. To add-
ress these objectives, the HLC has made
the following major recommendations.
(i) Fundamental changes in the role of
FCI.4
(ii) Reduction in the coverage of the NFSA
from 67% to 40% of the population.
(iii) Maintain the current issue prices of
Rs 3/kg for rice and Rs 2/kg for wheat
for the Antyodaya (below the poverty
line, or BPL) households for the time
being; and revise them upwards to half
Economic & Political Weekly EPW july 25, 2015
of their respective MSPs for priority
households.
(iv) Gradual transition from the public
distribution of foodgrains to cash trans-
fers. As regards the NFSA, the HLC reco-
mmends biannual rations to minimise
transaction costs, what it calls “various
hassles of monthly arrivals at FPS (fair
price shops)” (p vii), for the beneficiaries
and storage costs for the agencies.
Among others, it has recommended a
reconsideration of the MSP programme
for the following reasons. Though the
MSP policy provides for 23 commodities,
the benefits of support accrue only to
rice and wheat farmers in select states.
There is a need to formulate such poli-
cies for pulses and oilseeds (edible oils).
There is also a need to harmonise trade
and MSP policies.
It recommends “cash transfers” with
appropriate price indexation as an alter-
native option. This option is to be imple-
mented in phases, beginning in large
cities with a population exceeding a mil-
lion. The foodgrain deficit states will
have the option to choose between cash
and physical foodgrain distribution.
2 An Evaluation
Editorials as well as newspaper com-
mentaries have found fault with the
report mainly in its estimates of leakages
from the PDS. Few have bothered to exa-
mine the basics in policy formulation
such as criteria used, the concept of food
security, defining its critical parameters,
and estimating a profile of food insecu-
rity to verify how far the situation war-
rants the revisions in the extent of targe-
ting recommended. For any policy for-
mulation to be effective, there is a need
for a good understanding and specifica-
tion of the issue under review. This sec-
tion begins with an evaluation of the
HLC’s understanding of the context,
issues, methods, and interpretations.
2.1 Faulty Methods
Backdrop for the Food Corporation of
India: The HLC begins with what it calls
a “performance evaluation” of the FCI,
quite rightly, with reference to the
objectives specified. It appreciates its
relevance in the mid-1960s by citing
vol l no 30
PERSPECTIVES
statistical information to show how grim
the foodgrain situation in the country
was. Wheat production was about 10
million metric tonnes and the govern-
ment had to import about 6 million met-
ric tonnes of wheat under PL–480.
It provides estimates of percentages
irrespective of their relevance or with-
out any clarity on the message intended.
For instance, consider the following
description
The year 1965–66 was even worse. Produc-
tion of wheat dropped from 12.26 MMT in
1964–65 to 10.40 MMT in 1965–66, a drop of
about 15%. Imports of wheat increased fur-
ther from 6.57 MMT to 7.83 MMT, an increase
by 19% (GoI 2015: 10).
In fact, the percentage information
conceals the following message—when
wheat production declined by 1.86 mil-
lion tonnes, the country could/had to
manage with imports of 1.26 million
tonnes only, which was much less.5
As for its methods of policy evalua-
tion, the HLC seems to be blissfully una-
ware of the canons of effectiveness, effi-
ciency, equity, feasibility, and flexibility,
which do not get a mention in the report.6
Has the Backdrop Changed? The HLC
seeks to corroborate its thesis that the
current scenario in India no longer war-
rants an institution like the FCI by stat-
ing that per capita cereal consumption
of even the “lowest expenditure decile
groups are declining.” It is not clear from
where the HLC got such evidence. Previ-
ous expert groups as well as the Elev-
enth Five Year Plan arrived at such con-
clusions by looking at only estimates of
average cereal consumption (Suryana-
rayana 2009). Facts speak otherwise;
they provide evidence of an improve-
ment in cereal consumption (cereal com-
position inclusive) of the poorest decile
groups. Even the calorie intake of the
poorest three decile groups has been on
the increase (Suryanarayana 2011).
Has FCI Failed to Provide Effective
Price Support to Farmers? The HLC
claims that the FCI has failed to provide
effective price support to farmers. How
does it go about this evaluation? What is
its measure of “effective price”? It
provides evidence on the proportion of
45
PERSPECTIVES

farmers selling rice/wheat to state pro- involving a subsidy of Rs 50,000 crore. scenario of the issue under review, in-
curement agencies. This estimate is The situation is worse because of leak- volving a well-defined statement of the
about 6%. Hence, it concludes. ages to the extent of 46.7%. Estimates of problem, its critical norms and parame-
The upshot of this entire evidence is that the leakages cited from different studies ters, and an estimate of its magnitude.
direct benefit of procurement operations in (GoI 2015, Annexure 4: 59) show sub- One does not find any such status report
wheat and rice, with which FCI is primarily stantial leakages since 1999–2000. for the NFSA. This is in keeping with the
entrusted, goes to a minuscule of agricultur-
al households in the country. Obviously
Indian tradition of policymaking. The
then, much of the procurement that govern- 2.2 Food Security High Level Committee on Long-term
ment agencies undertake comes from larger The HLC has a poor understanding of the Grain Policy (GoI 2002) also dwelt at
farmers, and in a few selected states (Pun- context and developments. It begins length on the TPDS and its consequences
jab, Haryana, Andhra Pradesh and lately
from Madhya Pradesh and Chhattisgarh). In
with a preface which Table 1: Number per 1,000 of Agricultural Households Aware of
some of these states, state agencies procure states, “After ‘green Minimum Support Prices for Selected Crops, July–December 2012
Crop Number Per 1,000 of Households Of the Households Sold Estd No
70-90% of marketed surplus of wheat and revolution’ in foodgrain Reporting Sale of Crops to Procurement Agency of Households
rice, literally taking over the markets and production, country ac- Aware Aware of Sold to % of Sale Average Sale Reporting
crowding out private sector, committing simi- of MSP Procurement Procurement at MSP to Rate Received Sale of Crop
lar mistake as was committed during the
cepted the challenge of Agency Agency Total Sale at MSP (Rs) (00)
wholesale trade take over during 1973–75. It providing food security (1) (2) (3) (4) (5) (6) (7)
speaks of highly skewed incentive system in by adopting National Paddy 322 251 135 27 13.08 1,86,737
favour of larger farmers and the challenge is Food Security Act Jowar 83 63 17 1 13.5 15,106
how to ensure that benefits of procurement Bajra 160 102 30 2 10.83 17,487
operations reach a much larger number of
2013” (GoI 2015: ii).
Maize 106 76 42 8 13.18 34,563
agricultural households, especially smaller One is not sure how Ragi 25 25 4 2 14 3,549
ones (GoI 2015: 13). valid this premise is. Arhar (tur) 46 38 13 1 35.47 15,507
Is this a measure of effective price sup- The Green Revolution Urad 57 37 16 1 37.61 18,783
port? Effectiveness refers to, in an ex post essentially refers to the Moong 98 72 18 1 53.33 8,227
sense, the extent of realisation of desired adoption of high-yield- Sugar cane 398 361 310 34 2.79 36,000
outcomes generated by the policy meas- ing varieties of seed– Potato 42 32 2 32 6.75 8,625
Groundnut 64 45 11 2 39.4 15,509
ure. From an ex ante perspective, it would fertiliser technology to
Coconut 228 86 19 1 10.7 9,571
measure the potential to generate the de- promote foodgrain pro- Soyabean 79 57 36 6 29.25 45,017
sired outcome. The evidence presented by duction since the mid- Cotton 204 154 69 12 37.44 57,158
the HLC pertains to coverage and not price 1960s. Much before the Jute 154 91 6 0 18 9,038
effectiveness. NFSA, the Sixth Five Source: GoI (2014: 31).
Even otherwise, the HLC has not inter- Year Plan laid empha- Table 2: Number per 1,000 of Agricultural Households Aware of
preted facts from an objective perspec- sis on “reaching all Minimum Support Prices for Selected Crops, January–June 2013
tive, seeming to be selective in its choice parts of the country” Crop Number per 1,000 of Households of the Households Sold Estd No of
Reporting Sale of Crops to Procurement Agency Households
of facts and interpretations. The propor- even if it involved de- Aware of Aware of Sold to Pro- % of Sale Average Reporting
tion of farmers selling foodgrains to any livery of a few essential MSP Procure- curement at MSP to Sale Rate Sale of
ment Agency Total Sale Received Crop (00)
public procurement agency is low items only (GoI 1981b). Agency Household at MSP (Rs)
because of ignorance and poor infra- In 1987–88, the PDS (1) (2) (3) (4) (5) (6) (7)
structure (GoI 2014). The same NSS re- was listed as a new Paddy 315 187 100 14 13.15 54,578
port shows that a majority of the agricul- component of the Min- Jowar 213 207 192 36 13.83 4,565
tural households were ignorant about imum Needs Pro- Maize 118 61 29 4 11.45 19,581

MSPs and procurement institutions. More gramme. The NFSA has Wheat 392 345 162 35 13.99 1,29,991
Barley 110 105 16 1 40.75 1,432
than 50% of the households selling paddy essentially been a be-
Gram 126 97 39 5 29.96 33,190
who had such awareness sold grains to lated response to the
Arhar (tur) 142 131 47 1 47 3,517
procurement agencies. Even farmers emerging crisis reflected Moong 91 37 19 2 58 6,893
with an awareness of MSPs and public in, among others, farm- Masur 181 155 20 0 36 7,352
procurement of foodgrains could not ex- ers’ suicides, seemingly Sugar cane 454 407 366 33 3.25 20,558
ercise the option to sell because of the worsening foodgrain Potato 121 90 6 2 8.83 24,679
non-availability of a procurement agen- consumption, and the Onion 153 98 6 1 17.5 5,955
cy (Tables 1, 2 and Tables 3, 4, p 47). In persistence of child Groundnut 89 82 13 1 37.62 6,770
other words, a low proportion of FCI ben- under-nutrition. Rapeseed/mustard 155 128 29 14 30.84 36,155
eficiaries is a poor commentary on pro- Finally, even the Coconut 215 110 17 0 9.34 11,084

gramme implementation. NFSA (GoI 2013b) has Cotton 226 177 84 3 34.15 10,753
Source: GoI (2014: 32).
its own problems with
Effectiveness of FCI in Distributing concepts and estimates (Suryanarayana for food insecurity without a concept
Foodgrains across the Country: The 2013). Any policy formulation should and measure of food security. The HLC
distribution of foodgrains is costly, begin with a status report on the current is not an outlier in this respect.
46 july 25, 2015 vol l no 30 EPW Economic & Political Weekly
 PERSPECTIVES

How Valid and Comprehensive Is the dimensions—physical access to food, NFSA from 67% to 40%. Thus, it has an
Committee’s Concept and Understand- economic access to food and utilisation implicit measure in terms of cereal con-
ing of Food Security? The HLC is quite of food. sumption, which is outdated. Food secu-
eloquent in citing the Food and Agricul- rity is no longer defined and measured
tural Organization (FAO) definition and 2.3 Flawed Premises in terms of cereal consumption but diet
appropriate policy instruments as follows. Having accepted the FAO definition of diversity. Even countries such as Bangla-
Food security, widely defined by FAO, has ba- food security as physical and economic desh are far ahead of us in their concept
sically four pillars: (1) Availability: food access to “sufficient” food and its effec- and measure of food security and pursuit
should be available in sufficient quantity at tive utilisation, the HLC should have taken of pragmatic strategies. The contempo-
all times and at all places; (2) Affordability:
care to define a measure of food security rary approach to measure food security
food should be affordable, that is, people
should have economic access (ample income) and also a norm for it. But it does not. It is to use a dietary diversity index. In sum,
to buy food; (3) Absorption: food should be does not provide estimates of how many the HLC has neither an understanding of
safe and nutritious that body can absorb for a are food insecure. Table 3: Number per 1,000 of Agricultural Households Aware of Minimum
healthy life; and finally (4) Stability: food
It does not even Support Prices but Did Not Sell to Procurement Agency for Selected Crops,
July–December 2012
system should be reasonably stable, as high
volatility in food systems impacts adversely provide food inse- Crop Households Aware of MSP of Selected Crops among per 1,000 of HHs Reporting Estd
not only the poor but also endangers the sta- curity profiles Sale of Crops Did Not Sell to Procurement Agency by Reason No of
Aware Sold to Procure- No Local Poor Crop Received Others Total Households
bility of political and social systems. across regions or of Procure- ment Purc- Quality Already Better Reporting
The policy instruments to achieve various MSP ment Agency haser of Pre- Price Sale of
components of this concept of food security
over time, which is
Agency Not Crop pledged over Crop (00)
have differed from country to country and very essential to Available MSP
within the same country over a period of decide on issues re- (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
time. In India, price support policies, e g, be Paddy 322 135 31 18 4 2 12 117 187 1,86,734
lated to policy
they are in the form of MSPs for outputs or Jowar 83 17 6 8 0 0 17 34 66 15,106
subsidised prices for inputs (like fertilisers,
choice and the ex- Bajra 160 30 22 12 1 0 11 79 130 17,487
power, irrigation, etc) are basically to en- tent of targeting Maize 106 42 8 18 1 1 10 25 64 34,563
courage farmers to increase production, and across space/over Ragi 25 4 3 2 0 2 4 10 21 3,549
thereby ‘availability’ of food. time. For instance, Arhar (tur) 46 13 2 5 1 0 15 11 33 15,507
The policy of giving highly subsidised wheat Urad 57 16 2 13 1 0 4 20 41 18,783
and rice to some sections of society through unabated child un-
Moong 98 18 7 6 0 0 16 50 79 8,227
TPDS, including as envisaged under NFSA, is der-nutrition is a Sugar cane 398 310 9 2 3 2 6 64 88 36,000
an instrument to provide ‘economic access’ much cited issue in Potato 42 2 4 1 0 0 1 17 40 8,625
to food, the other pillar of food security.
the context of de- Groundnut 64 11 22 2 0 1 8 20 53 15,509
About ‘absorption’ pillar of food security, GoI
follows several programs ranging from Inte- bates on the NFSA. Coconut 228 19 60 13 28 3 8 97 209 9,571
Soyabean 79 36 9 2 1 0 9 21 43 45,017
grated Child Development Scheme to food It is true a signifi-
Cotton 204 69 34 18 4 1 33 45 134 57,158
safety to immunisation, etc. FCI’s role is basi- cant proportion of Jute
cally to supply wheat and rice for ‘other wel- 154 6 74 15 0 0 4 54 147 9,038
the child population Source: GoI (2014: 33).
fare schemes’ to states, which are being cov-
ered under NFSA. Many other schemes rele- is underweight. Table 4: Number per 1,000 of Agricultural Households Awareness of
vant for ‘absorption,’ especially those of safe Limited medical Minimum Support Prices but Did Not Sell to Procurement Agency for
drinking water and girl child’s education go and nutritional care Selected Crops, January–June 2013
beyond the scope of this Committee. Crop Households Aware of MSP of Selected Crops among per 1000 of HHs Reporting Estd
The instrument of buffer stocking (beyond
during the first Sale of Crops Did Not Sell to Procurement Agency by Reason No of
1,000 days of preg- Aware Sold to Procure- No Local Poor Crop Received Others Total Households
the needs of PDS), especially strategic re- of Procure- ment Purc- Quality Already Better Reporting
serves, is primarily to provide stability to nancy is a major MSP ment Agency haser of Pre- Price Sale of
food system. Currently, only 5 MMT is pro- explanatory factor. Agency Not Crop pledged over Crop (00)
vided for that. Occasional export controls or Available MSP
allowing imports (especially when actual
There are other fac- (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
stocks fall below buffer norms, as happened tors such as poor Paddy 315 100 53 19 5 7 13 117 215 54,578
in 2006–07) are also parts of the same policy feeding practices, Jowar 213 192 2 12 0 0 0 8 21 4,565
package trying to ensure stability of food Maize 118 29 18 21 0 4 7 40 90 19,581
hygiene and gen-
systems (GoI 2015: 17–18). Wheat 392 162 18 18 3 2 12 171 230 1,29,991
der that explain Barley 110 16 39 3 0 0 8 45 94 1,432
This quote provides unambiguous evi- this Indian (Asian) Gram 126 39 9 7 2 0 15 55 87 33,190
dence to show that the HLC does not enigma (Ramalin- Arhar (tur) 142 47 0 2 0 0 73 20 95 3,517
have a comprehensive understanding of gaswami et al 1996). Moong 91 19 24 1 0 0 2 45 72 6,893
Masur 181 20 2 99 0 0 22 38 161 7,352
the concept of food security. As for the However, with-
Sugar cane 454 366 12 1 3 0 4 52 88 20,558
dimensions (what the HLC calls “pil- out information on Potato 121 6 22 29 0 0 19 43 115 24,679
lars”) of food security, it may be noted the magnitude or Onion 153 6 37 7 0 0 24 78 147 5,955
that its description of “stability” is even a profile, the Groundnut 89 13 16 23 0 0 4 32 76 6,770
wrong. It does not refer to buffer stock- HLC has recom- Rapeseed/ 155 29 17 4 1 0 8 95 125 36,155
mustard
ing to ensure stability of the food sys- mended reduction Coconut 215 17 48 9 1 5 20 115 198 11,084
tem. Stability as conceived in the FAO in the population Cotton 226 84 25 20 2 0 48 46 142 10,753
formulation pertains to the first three coverage of the Source: GoI (2014: 33).
Economic & Political Weekly EPW july 25, 2015 vol l no 30 47
PERSPECTIVES
revisions in the measures of food security
nor even a comprehensive sense of out-
dated measures and estimates. An
important reason for food insecurity is
inadequate economic access. The limit-
ed access of poor households to the PDS
is, in turn, due to inadequate income
and liquidity, undermining their ability
to buy bimonthly rations even at the
current issue prices. Given this, it is not
clear how the HLC, in its infinite wis-
dom, recommends biannual rations for
poor households, along with a proposal
to raise the issue prices to 50% of MSPs.
2.4 Cash Transfers?
The HLC recommends cash transfer as
an alternative cost-effective option to
help the poor without any distortion in
the production basket (whatever it
means). How far can cash transfers be a
feasible alternative to the PDS? It would
be a feasible option so long as inade-
quate economic access is the only critical
constraint on realising food security.
However, several studies between 1960
and 1990 have shown that physical ac-
cess is a major factor that affects food
security in the rural sector. Could the
JAM (Jan Dhan Yojana, Aadhaar and mo-
bile) number trinity provide an effective
policy option? This is quite unlikely in
the near future since the state of bank-
ing infrastructure in remote rural areas
is quite inadequate. It would be a feasi-
ble option only in urban India, which
has a developed market infrastructure.
3 Conclusions
An inadequate information base and
limited institutional capacity for policy
formulation seem to be important fac-
tors constraining India’s public policy
pursuits. One could cite policy docu-
ments ad infinitum to illustrate this
point. The scenario has not changed
even after more than six decades of such
pursuits. Even now, we do not have com-
prehensive and objective estimates of
distribution parameters. This is further
compounded by limited institutional ca-
pacity to appreciate concepts and meas-
ures, and interpret estimates. But
experts/expert groups continue to com-
ment on trends in deprivation, irrespec-
tive of the information available. The
48
report of the HLC provides some such il-
lustrations. It carries out a performance
evaluation without any reference to the
criteria used as standards in such an ex-
ercise. It examines price effectiveness
with reference to the proportion of farm-
ers benefiting by selling foodgrains to
the public procurement agency. It rec-
ommends revisions in the extent of the
NFSA’s coverage without a comprehen-
sive understanding of the concept of
food security, its measure and magni-
tude. It recommends policy options with
little appreciation of the constraints
binding poor households in their house-
hold budget decisions. In sum, policy-
making has become an exercise in crea-
tive fiction.
Notes
1 Even academic experts are no exception to this
syndrome (Suryanarayana 1995).
2 For further details, see Suryanarayana (2009).
3 The terms of reference of the committee were
as follows:
(i) To examine the present-day administrative,
functional and financial structure of FCI and
modus operandi of its various operations.
(ii) To study various models of restructuring or
unbundling of and to suggest a best suited
model for restructuring or unbundling of FCI
to improve its operational efficiency and finan-
cial management.
(iii) To suggest measures for overall improve-
ment in management of foodgrains by FCI.
(iv) To define or give suggestions to reorient
the role and functions of FCI in MSP opera-
tions, storage and distribution of foodgrains
and food security systems of the country.
(v) To suggest a way forward for strengthening
and integration of supply chain of foodgrains
in the country.
(vi) To suggest most efficient and cost-effective
model from the point of view of storage and
least cost option of moving grains.
(vii) To recommend scientific model of storage.
(viii) To recommend rationalised mode of mov-
ing grains including tracking of carriage.
(ix) To suggest the upgradation of technology
in management of foodgrains (GoI 2015: 50–51).
4 Some of these changes are as follows: (i) FCI
procurement to be confined to regions/states
such as Eastern Uttar Pradesh, Bihar, West
Bengal, and Assam where farmers do not get
MSPs; (ii) FCI to hand over procurement of
wheat and rice to six states (Andhra Pradesh,
Chhattisgarh, Haryana, Madhya Pradesh, Odi-
sha, and Punjab) with reasonable infrastruc-
ture; (iii) outsource grain storage to private
and government agencies such as the state-
owned Central Warehousing Corporation
(CWC), state warehousing corporations (SWCs),
and private organisations; (iv) introduce an
uniform tax of a minimum 3% and maximum
4% on wheat and rice, which would be includ-
ed in the MSP; (v) computerise the foodgrain
distribution network and set up a vigilance
committee; (vi) promote private investment in
logistics in the next two to three years and bulk
handling of foodgrains through grain trains.
july 25, 2015
5 If, in a class of two students, if one fails, one
would not report is as a 50% failure.
6 These canons are as follows. Effectiveness has
essentially to with the potential for realising
the desired outcome; efficiency involves a cost-
benefit analysis of impact on the targeted
group; equity is concerned with verifying fair-
ness in the distribution of costs and benefits;
feasibility has to do with the verification of the
institutional arrangement for the implementa-
tion of the option under review; and flexibility
is concerned with verifying the potential for
adaptation/modification to suit alternative sit-
uations or superior scenarios (Young and
Quinn 2002).
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