A CASE STUDY IN BUSINESS MANAGEMENT ( for all MBAs) —INDIAN FOOD SECURITY BILL 2013

Tejnder Narang

The process of approval of Indian “Food Security Bill” in the lower house of Parliament on 26^th August 2013 must be cited as a classical case to emphasize contradictions in psyche of human behaviour. In all management institutes—be it Harvard, Wharton, IIMs or elsewhere and even the student of economics at Oxford, Cambridge, and all universities must study the “Principle Of Political Convenience” as practiced by the Indian polity.

a.       Methodical madness is a profession in politics. Voting may be opposite to whatever is professed publicly or on the floor of parliament.

b.      Can anti- reform policies be lauded as reform because it suits vote bank politics? (Oxymoronic views are popular indeed.)

c.       Since democracy runs on majority, even if it is 50.1% and minority as 49.9% --the former is right and the latter wrong. Herd mentality must prevail!!     

d.      Life is an event of irrationality. Voices of sanity (eminent economists/scientists) have to be ignored in politics by forgetting righteousness of personal beliefs.

e.       Can all poor be defined hungry as well?

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The economic rationale and viability of Indian Food Security Bill was questioned and challenged with vociferous concerns by almost all national parties in public, media and parliament. At around 11 pm on 26^th August, this bill was approved with massive majority in the Lower House of Indian Parliament.  This was a classic case of a mobocracy fearing that its formal opposition could lead to negative electoral consequences even if it amounted to guillotining vital national interest of fiscal management, straining Indian economy into a messy domain, and putting at stake productiveness of human endeavor and dignity. Even the main opposition party (BJP) gave a muted resistance to its passage.

The dissenters could have walked out as they routinely do in other political squabbles but did not, as if some sort of backdoor deal was struck. Is this the right paradigm of  supremacy of Parliamentary Democracy?? Does it exists all over the world or is peculiar to the Indian polity?? Has the opposition purposely colluded with the ruling party to bring the national economy to its knees? Blame game can then be shifted to UPA, while BJP benefits electorally.

ERRONEOUS ACT

Is it not an erroneous Act of granting merely “right” to food for 5kg/month of cereals (wheat, rice, corn) with 90% subsidization (Rs. 3-2-1/kg respectively) to 67% (about 800 million) of Indian population --though officially (World Bank norms)  only 22% are poor and  when the systematic leakages are 50% and costs to rise annually?? And all poor are not hungry. (Statistically India has 1% hungry and poverty has diminished by about 15% in last eight years).

The responsibility of implementation is given to FCI/ State Governments who have been found wastefully wanting in its implementation for last 50 years.  Yes this is a “right for food” that a hungry stomach can claim through extended litigation in a court. Allegorically, climb the Mount Everest to fetch butter?? Laughable indeed.

The food subsidy is stated to be $20 billion by the Government while it is believed to be $40 billion annually, during the next three years as per the Government's own agro –economists Dr. Ashok Gulati. The posterity may have to a very high price for this grossly flawed Act. The very next day—27^th August2013- stock market saluted down by 600 points and Indian rupee depreciated by 3%. This was the real verdict and response to the parliamentary action.

But at macro level it is indicative of harsh realities of Life—

1         Democracy means 50.1% as majority vs 49.9% as minority.

2         Majority is morality; minority is immorality.

3         Herd mentality is much more powerful than righteousness—despite being aware of what is right.

4         Logic and rationality is subservient to greed of power and pelf. 

5         Understanding this unreasonableness is the norm of right sensibilities for perpetuating personal power.

6         Voices of sanity (of eminent economists) have to be ignored in the science of politics and polls.

7         Immediate gains (electoral) are important than long terms side effects (unsustainable fiscal deficit). For example-- curing cold instantly with a wrongly prescribed medicine with irreversible asthmatic effects is accepted. 

8         Misleading the impoverished is deemed acceptable by projecting an illusion of prosperity.

9         Telling the people that they are poor, while they are not, is a passion of compassion.

The passage of the bill has sent shock waves to all who believed Indian economy is out of the tentacles of socialist thinking. Liberalization of Indian economy stands perversely reversed at the peril of not only middle and upper classes of Indian society, but may also further drag the poor into drain of poverty rather than prosperity. Political convenience for perpetuation of power is the name of the game.