Nov. 23 (Bloomberg) -- India is caught in an ugly societal whodunit: Although the per capita gross domestic product for the country’s 1.2 billion people has almost doubled over the past decade, to $838, malnutrition and hunger are still rampant, especially among children.
A months-long series of investigative reports by Bloomberg News highlights that India’s failure to adequately feed its people is a crisis born not from want of money but, more damningly, from lack of political will to confront pervasive corruption and incompetence.
Death by starvation is increasingly uncommon. Yet in 2005, when the most recent edition of India’s National Family Health Survey was published, 21 percent of all adults were malnourished, compared with 17 percent a decade earlier. India still has, by a large margin, the greatest number of malnourished children -- in India’s case, 46 percent of all children under 5. Half of all children under 3 are underweight, and eight in 10 are anemic -- a dismal distinction that puts India near the bottom of this particular global health scorecard.
India spends a growing amount of money to feed its poor. Since 1965, with the creation of the Food Corporation of India, it has operated the world’s largest public food distribution system. This year’s budget will allocate almost $14 billion to purchases of wheat, rice and other foods that the poor, who are issued Below Poverty Line ration cards, can purchase at cut-rate prices from almost half a million Fair Price Shops. The Food Corporation of India is required to stockpile 32 million metric tons of rice and wheat, and it now has more than twice that amount on hand, thanks to record harvests.
Unfortunately, less than half the food aid intended for the poor ultimately reaches them. Grain rots in open bins, sheds and warehouses before it can be distributed. Crooked politicians and middlemen divert it to resell at inflated prices. Ration cards don’t go to the right people: One 2009 study estimated not only that a majority of India’s poor did not have a BPL card, but also that about 44 percent of BPL cards went to the non-poor.
According to data compiled by Bloomberg, in the state of Uttar Pradesh alone, as much as $14.5 billion in food aid went missing during the past decade. One whistle-blower pointed the finger at the state’s food minister, Raja Bhaiya, who has separately been charged with (but never convicted of) attempted murder, kidnapping, armed robbery and electoral fraud. All told, according to a World Bank study released in 2011, 58 percent of India’s food aid is lost to graft and waste. A fact-finding commission for India’s Supreme Court said that the food system had failed in its mission and “fallen into a shambles.”
The Indian government’s response hasn’t been particularly commendable. When a Bloomberg reporter pressed K.V. Thomas, India’s food minister, for his response to reports of corruption and mismanagement, he denied any problems and kicked the reporter out. Five overlapping investigations over the past seven years into food diversion schemes have produced no convictions.
Notwithstanding the demonstrated weaknesses of the current approach, the coalition led by Prime Minister Manmohan Singh is seeking to introduce a Food Security Bill that expands the sale of subsidized grain to nearly 70 percent of the population, and increases the amount spent each year on the program by at least 320 billion rupees ($5.8 billion).
We don’t think that throwing more good money and grain down a literal rathole will help India’s poor. Instead, India would be better served by expanding direct cash payments, as a pilot program has done in three states. Moving cash is a lot easier and more transparent than moving grain, and seemingly more effective: recipients of the cash had better diets, and ration shops actually improved the quality of their food, presumably because they were worried about customers going elsewhere.
What India needs to help its poor is the same kind of bold, savvy political leadership that enabled Brazil’s Luiz Inacio Lula da Silva to reduce hunger and poverty in his country with a program that relied on cash transfers. Sadly, that kind of innovation isn’t on the horizon.
Still, India can take steps to make the current approach work better. These include accelerating plans to institute photo IDs for assistance beneficiaries and to computerize the food delivery system, enabling better tracking of grain shipments. To target aid recipients better, the government could use not just national and state income and consumption benchmarks but also make greater use of local community appraisals, drawing on best practices in different states.
The national government also needs to collect more and better data on the extent of malnutrition. Activists were alarmed by the decision to shut down the website of the National Family Health Survey, and by reports that its next edition would be postponed. It needs instead to speed distribution of NFHS results. As it is, there will already be a 10-year gap between surveys, making it hard to judge the effectiveness of programs.
Of course, we can’t resist pointing out the added benefit of accelerated economic reforms: foreign investment that can create jobs and, not least, generate tax revenue to support food assistance programs. Indians may legitimately debate the role of the “foreign hand” in their economy. The inexcusable corruption and waste in its food aid programs, though, are the work of homegrown crooks, not foreign multinationals. That’s a problem only Indians can solve. As B. R. Ambedkar, the champion of the poorest castes, said in marking the introduction of India’s constitution, 62 years ago, “If hereafter things go wrong, we have nobody to blame except ourselves.”
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Today’s highlights: the editors on how to improve lives of retail workers; Caroline Baum on watching the Fed and other gossip; Michael Kinsley on how voters don’t really want change; William Pesek on Indonesia’s failure to sustain reforms; Jonathan Weil on the accounting industry’s watchdog committee; Whitney Tilson and Anthony Scaramucci on coming together to raise taxes and cut entitlements.
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