Story so far: Why is FCRA back in the news?
The Foreign Contribution (Regulation) Amendment Bill, 2026 seeks to further amend the Foreign Contribution (Regulation) Act, 2010—the principal law governing foreign donations received by NGOs, charitable organisations, religious bodies and other eligible entities in India.
The issue has become important because foreign contributions constitute a significant source of funding for India’s civil-society sector. The government’s Statement of Objects and Reasons notes that around 16,000 associations were registered under FCRA and received roughly ₹22,000 crore annually. It argues that experience with the law has exposed operational and legal gaps, particularly concerning what happens to foreign-funded money and assets when an organisation loses its FCRA registration.
The 2026 Bill therefore attempts to move FCRA regulation beyond merely asking “Where did the foreign money come from and how was it spent?” to a further question:
“What happens to the assets created from foreign money when the organisation can no longer legally receive foreign contributions?”
The Bill was introduced in the Lok Sabha on 25 March 2026 and has subsequently been referred to a 31-member Joint Parliamentary Committee (JPC) for detailed examination.
What is FCRA and what is its objective?
FCRA = Foreign Contribution (Regulation) Act.
In simple terms, FCRA is India’s system for regulating foreign money entering Indian civil society and other eligible organisations.
The 2010 Act describes its purpose as regulating the acceptance and utilization of foreign contributions and foreign hospitality and preventing their use for activities detrimental to the national interest.
Why does India regulate foreign donations?
Foreign money is not automatically illegal or undesirable. Foreign funding supports:
- education,
- healthcare,
- disaster relief,
- environmental work,
- research,
- poverty alleviation,
- humanitarian activities and
- religious and charitable activities.
But the State has a legitimate concern that foreign financial resources should not be used to:
- undermine national security,
- influence political processes,
- disturb public order,
- finance prohibited activities, or
- circumvent India’s laws.
Therefore, the basic FCRA philosophy can be expressed as:
Foreign contribution → permitted recipient → permitted purpose → transparent utilisation → accountability
The law tries to balance two competing objectives:
Freedom of association and legitimate civil-society activity VS National security, transparency and accountability.
That tension lies at the heart of today’s FCRA debate.
History of FCRA:
1. Why was FCRA created in the first place?
The story begins in the 1970s.
India enacted its first Foreign Contribution (Regulation) Act in 1976. The concern was not simply charitable donations. The broader concern was that foreign money could potentially influence India’s political and public life.
The original law therefore sought to regulate the acceptance and utilisation of foreign contributions and foreign hospitality.
The underlying principle was straightforward:
A sovereign country should know when foreign financial resources are entering its political, social and institutional space and how those resources are being used.
The concern became particularly significant in the context of the Cold War, when foreign governments, political organisations and ideological groups could use financial assistance as a means of influence.
Thus, FCRA was born primarily as a foreign-influence vis-a-vis national-interest regulation, rather than merely as an NGO accounting law.
2. Historical amendments: How did FCRA evolve?
The law has been tightened and modernised several times.
1976 — Original FCRA
The first FCRA was enacted.
Core objective:
Regulate foreign contributions + prevent undesirable foreign influence.
1984 — Strengthening the regulatory framework
The 1984 amendment expanded the regulatory framework.
Among other things, it:
- made registration with the Home Ministry mandatory for NGOs receiving foreign funds;
- brought judges within the Act;
- broadened the definitions of foreign contribution and political party;
- strengthened audit-related powers.
The direction was clear:
More categories + greater disclosure + stronger government oversight.
2010: The major reset
By the 2000s, the 1976 law had become increasingly outdated. India’s economy had opened up, international philanthropy had expanded and foreign financial flows had become much more complex. Parliament therefore enacted the Foreign Contribution (Regulation) Act, 2010, replacing the 1976 Act.
The new Act came into force on 1 May 2011.
What changed?
The 2010 Act introduced a more comprehensive compliance architecture.
Among its important features were:
- FCRA registration valid for five years
- mandatory renewal;
- stricter eligibility conditions;
- provisions for suspension and cancellation;
- provisions relating to vesting of assets;
- compounding of certain offences;
- clearer regulatory procedures.
A crucial point for understanding the 2026 Bill
The idea of vesting assets created from foreign contribution after cancellation of registration was NOT invented in 2026. It was already present in Section 15 of the FCRA, 2010.
The 2026 Bill attempts to create a much more elaborate mechanism for supervising, managing and eventually disposing of those assets. The government itself acknowledges that the concept of vesting was already part of the 2010 Act.
2016 and 2018: Further adjustments
The framework continued to be amended in 2016 and 2018, making technical and procedural changes to the operation of FCRA.
The broader trajectory remained the same:
greater transparency + tighter compliance + stronger monitoring of foreign contributions.
The government describes the evolution of FCRA over the last five decades as a progressive strengthening of disclosure, accountability and governance, rather than as a prohibition on foreign funding itself.
2020: The most significant recent tightening
The FCRA Amendment Act, 2020 substantially strengthened government oversight.
Some of its most important changes were:
1. SBI account
Foreign contributions had to be received through a designated State Bank of India account at the New Delhi Main Branch.
2. Administrative expenses
The permissible ceiling for administrative expenses was reduced from:
50% → 20%
of foreign contribution received.
3. No transfer of foreign contribution
Organisations receiving foreign contributions were restricted from transferring those funds to another association.
4. Identification requirements
Aadhaar/passport-related identification requirements were introduced for key functionaries.
5. Stronger renewal scrutiny
Renewal of registration became subject to greater government scrutiny.
The 2020 amendment therefore marked a shift towards much tighter financial traceability and control.
2022–25: Some relaxation alongside tighter monitoring
The subsequent period is important because the evolution of FCRA has not been a one-way tightening.
For example, in 2022, the limit on foreign contributions that an individual could receive from relatives abroad without triggering the relevant reporting requirement was increased from ₹1 lakh to ₹10 lakh per year.
There were also changes concerning compounding of offences and certain compliance requirements.
Thus, the overall picture is better described as: Tighten where national-interest/accountability concerns arise + simplify where compliance is unnecessarily burdensome.
2026: What is the new Amendment Bill trying to change?
The 2026 Bill addresses what the government describes as “operational and legal gaps”, particularly surrounding organisations whose FCRA registration is cancelled, surrendered or otherwise ceases.
The most important proposal is the creation of a Designated Authority.
The problem
Imagine:
NGO receives foreign contribution
↓
Uses it to construct:
School / hospital / office / place of worship
↓
Its FCRA registration is cancelled or expires.
Now what happens to the building and remaining foreign contribution?
The existing law contained a vesting provision, but the government argues that there was no comprehensive framework dealing with:
- possession,
- supervision,
- management,
- preservation and
- disposal
of such assets.
The government says this created administrative uncertainty and potential scope for misuse.
The proposed solution
The 2026 Bill proposes a system broadly along these lines:
FCRA registration ceases
↓
Foreign contribution + foreign-funded assets provisionally vest in Designated Authority
↓
Authority supervises/manages the assets
↓
If registration is restored within the prescribed period:
Assets + unused foreign contribution returned
↓
If registration is not restored:
Permanent vesting can follow under the proposed framework.
The Bill also provides mechanisms for revision and judicial appeal against orders of the Designated Authority.
Other important changes proposed in 2026
The Bill goes beyond assets.
1. Clearer “cessation” of FCRA registration
Registration may cease when:
- it is cancelled;
- the organisation surrenders it;
- renewal is not sought; or
- renewal is refused.
This creates a clearer legal status for organisations that are no longer eligible to operate under FCRA.
2. Regulation of assets during suspension
The Bill proposes restrictions concerning assets created from foreign contributions while an organisation’s FCRA registration is suspended.
3. Time limits for prior permission
Where an organisation receives foreign contribution through prior permission, the Bill seeks clearer provisions regarding the period within which the contribution must be received and utilised.
4. Coordinated investigations
State agencies would require Central Government approval before initiating an investigation under FCRA. The government’s justification is that FCRA concerns foreign contributions, foreign relations and national security, and that multiple agencies conducting parallel investigations could result in contradictory proceedings.
5. Rationalisation of penalties
Interestingly, the Bill does not simply increase punishment. It proposes reducing the maximum imprisonment for relevant FCRA violations from: 5 years → 1 year.
Thus, the Bill combines stronger administrative control with some reduction in criminal punishment.
FCRA Rules, 2026:
On 22 June 2026, the government notified the FCRA (Amendment) Rules, 2026. These are already notified rules, whereas the Amendment Bill is still under parliamentary consideration.
The 2026 Rules introduce, among other things:
- specification of the exact purposes for which an organisation is registered;
- specification of the States/UTs in which it is permitted to operate;
- enhanced reporting requirements;
- project/activity-wise and donor-related disclosures;
- a requirement for organisations renewing registration to demonstrate utilisation of at least ₹10 lakh of foreign contribution over the preceding two years.
The Current Debate: Accountability vs Autonomy
The controversy over the 2026 Bill is ultimately about how much control the government should have over organisations receiving foreign money.
Government’s argument
The government’s position can be summarised as: Foreign contribution creates public-interest obligations.
If foreign money is used to create an asset in India, that asset should not simply become an unregulated private resource after the organisation loses its FCRA status.
The government therefore argues that the Bill:
- closes legal loopholes;
- prevents misuse;
- provides administrative certainty;
- protects foreign-funded assets;
- coordinates investigations;
- increases transparency; and
- creates a clearer framework for organisations whose FCRA status ends.
The government also stresses that the proposed vesting is initially provisional and that restoration mechanisms and judicial remedies exist.
Critics’ argument
Critics, including Opposition parties and sections of civil society and religious organisations, are concerned about the extent of executive power.
Their principal concern is:
Could regulation of foreign contributions become indirect government control over the property and functioning of civil-society organisations?
The most contentious provision is therefore the Designated Authority.
For example, an organisation could have an asset funded through a combination of:
60% foreign contribution + 40% domestic funds.
Critics worry that the State could initially take control of the entire asset, even though only part of it was created using foreign money.
The Bill does provide a mechanism concerning the return of the identifiable portion attributable to other sources, but the debate remains over whether such executive control is proportionate.
Conclusion:
The history of FCRA reveals a gradual evolution.
1976
Concern: Foreign influence
↓
1984
Concern: Greater registration, disclosure and oversight
↓
2010
Concern: Modernise and strengthen the entire regulatory architecture
↓
2020
Concern: Tight financial traceability, accountability and restrictions on misuse
↓
2026
Concern: What happens to foreign-funded money and assets when FCRA status ends?
This is the central significance of the 2026 Bill.
The debate, therefore, is not simply about foreign donations. It is about the larger relationship between foreign funding, national security, civil society, religious institutions, property rights and executive power.
A balanced FCRA regime must achieve two objectives simultaneously:
Foreign money should not become a channel for illegitimate foreign influence.
But equally:
Regulation of foreign funding should not become a mechanism for unnecessarily weakening legitimate civil society.
In short:
The FCRA Amendment Bill, 2026 represents a shift from merely regulating the inflow and utilisation of foreign money to also regulating the legal fate of the assets created from that money.
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- Items provided through FPS
- The scale of rations
- The price of items distributed through FPS across states.
Petrol in India is cheaper than in countries like Hong Kong, Germany and the UK but costlier than in China, Brazil, Japan, the US, Russia, Pakistan and Sri Lanka, a Bank of Baroda Economics Research report showed.
Rising fuel prices in India have led to considerable debate on which government, state or central, should be lowering their taxes to keep prices under control.
The rise in fuel prices is mainly due to the global price of crude oil (raw material for making petrol and diesel) going up. Further, a stronger dollar has added to the cost of crude oil.
Amongst comparable countries (per capita wise), prices in India are higher than those in Vietnam, Kenya, Ukraine, Bangladesh, Nepal, Pakistan, Sri Lanka, and Venezuela. Countries that are major oil producers have much lower prices.
In the report, the Philippines has a comparable petrol price but has a per capita income higher than India by over 50 per cent.
Countries which have a lower per capita income like Kenya, Bangladesh, Nepal, Pakistan, and Venezuela have much lower prices of petrol and hence are impacted less than India.
“Therefore there is still a strong case for the government to consider lowering the taxes on fuel to protect the interest of the people,” the report argued.
India is the world’s third-biggest oil consuming and importing nation. It imports 85 per cent of its oil needs and so prices retail fuel at import parity rates.
With the global surge in energy prices, the cost of producing petrol, diesel and other petroleum products also went up for oil companies in India.
They raised petrol and diesel prices by Rs 10 a litre in just over a fortnight beginning March 22 but hit a pause button soon after as the move faced criticism and the opposition parties asked the government to cut taxes instead.
India imports most of its oil from a group of countries called the ‘OPEC +’ (i.e, Iran, Iraq, Saudi Arabia, Venezuela, Kuwait, United Arab Emirates, Russia, etc), which produces 40% of the world’s crude oil.
As they have the power to dictate fuel supply and prices, their decision of limiting the global supply reduces supply in India, thus raising prices
The government charges about 167% tax (excise) on petrol and 129% on diesel as compared to US (20%), UK (62%), Italy and Germany (65%).
The abominable excise duty is 2/3rd of the cost, and the base price, dealer commission and freight form the rest.
Here is an approximate break-up (in Rs):
a)Base Price | 39 |
b)Freight | 0.34 |
c) Price Charged to Dealers = (a+b) | 39.34 |
d) Excise Duty | 40.17 |
e) Dealer Commission | 4.68 |
f) VAT | 25.35 |
g) Retail Selling Price | 109.54 |
Looked closely, much of the cost of petrol and diesel is due to higher tax rate by govt, specifically excise duty.
So the question is why government is not reducing the prices ?
India, being a developing country, it does require gigantic amount of funding for its infrastructure projects as well as welfare schemes.
However, we as a society is yet to be tax-compliant. Many people evade the direct tax and that’s the reason why govt’s hands are tied. Govt. needs the money to fund various programs and at the same time it is not generating enough revenue from direct taxes.
That’s the reason why, govt is bumping up its revenue through higher indirect taxes such as GST or excise duty as in the case of petrol and diesel.
Direct taxes are progressive as it taxes according to an individuals’ income however indirect tax such as excise duty or GST are regressive in the sense that the poorest of the poor and richest of the rich have to pay the same amount.
Does not matter, if you are an auto-driver or owner of a Mercedes, end of the day both pay the same price for petrol/diesel-that’s why it is regressive in nature.
But unlike direct tax where tax evasion is rampant, indirect tax can not be evaded due to their very nature and as long as huge no of Indians keep evading direct taxes, indirect tax such as excise duty will be difficult for the govt to reduce, because it may reduce the revenue and hamper may programs of the govt.
Globally, around 80% of wastewater flows back into the ecosystem without being treated or reused, according to the United Nations.
This can pose a significant environmental and health threat.
In the absence of cost-effective, sustainable, disruptive water management solutions, about 70% of sewage is discharged untreated into India’s water bodies.
A staggering 21% of diseases are caused by contaminated water in India, according to the World Bank, and one in five children die before their fifth birthday because of poor sanitation and hygiene conditions, according to Startup India.
As we confront these public health challenges emerging out of environmental concerns, expanding the scope of public health/environmental engineering science becomes pivotal.
For India to achieve its sustainable development goals of clean water and sanitation and to address the growing demands for water consumption and preservation of both surface water bodies and groundwater resources, it is essential to find and implement innovative ways of treating wastewater.
It is in this context why the specialised cadre of public health engineers, also known as sanitation engineers or environmental engineers, is best suited to provide the growing urban and rural water supply and to manage solid waste and wastewater.
Traditionally, engineering and public health have been understood as different fields.
Currently in India, civil engineering incorporates a course or two on environmental engineering for students to learn about wastewater management as a part of their pre-service and in-service training.
Most often, civil engineers do not have adequate skills to address public health problems. And public health professionals do not have adequate engineering skills.
India aims to supply 55 litres of water per person per day by 2024 under its Jal Jeevan Mission to install functional household tap connections.
The goal of reaching every rural household with functional tap water can be achieved in a sustainable and resilient manner only if the cadre of public health engineers is expanded and strengthened.
In India, public health engineering is executed by the Public Works Department or by health officials.
This differs from international trends. To manage a wastewater treatment plant in Europe, for example, a candidate must specialise in wastewater engineering.
Furthermore, public health engineering should be developed as an interdisciplinary field. Engineers can significantly contribute to public health in defining what is possible, identifying limitations, and shaping workable solutions with a problem-solving approach.
Similarly, public health professionals can contribute to engineering through well-researched understanding of health issues, measured risks and how course correction can be initiated.
Once both meet, a public health engineer can identify a health risk, work on developing concrete solutions such as new health and safety practices or specialised equipment, in order to correct the safety concern..
There is no doubt that the majority of diseases are water-related, transmitted through consumption of contaminated water, vectors breeding in stagnated water, or lack of adequate quantity of good quality water for proper personal hygiene.
Diseases cannot be contained unless we provide good quality and adequate quantity of water. Most of the world’s diseases can be prevented by considering this.
Training our young minds towards creating sustainable water management systems would be the first step.
Currently, institutions like the Indian Institute of Technology, Madras (IIT-M) are considering initiating public health engineering as a separate discipline.
To leverage this opportunity even further, India needs to scale up in the same direction.
Consider this hypothetical situation: Rajalakshmi, from a remote Karnataka village spots a business opportunity.
She knows that flowers, discarded in the thousands by temples can be handcrafted into incense sticks.
She wants to find a market for the product and hopefully, employ some people to help her. Soon enough though, she discovers that starting a business is a herculean task for a person like her.
There is a laborious process of rules and regulations to go through, bribes to pay on the way and no actual means to transport her product to its market.
After making her first batch of agarbathis and taking it to Bengaluru by bus, she decides the venture is not easy and gives up.
On the flipside of this is a young entrepreneur in Bengaluru. Let’s call him Deepak. He wants to start an internet-based business selling sustainably made agarbathis.
He has no trouble getting investors and to mobilise supply chains. His paperwork is over in a matter of days and his business is set up quickly and ready to grow.
Never mind that the business is built on aggregation of small sellers who will not see half the profit .
Is this scenario really all that hypothetical or emblematic of how we think about entrepreneurship in India?
Between our national obsession with unicorns on one side and glorifying the person running a pakora stall for survival as an example of viable entrepreneurship on the other, is the middle ground in entrepreneurship—a space that should have seen millions of thriving small and medium businesses, but remains so sparsely occupied that you could almost miss it.
If we are to achieve meaningful economic growth in our country, we need to incorporate, in our national conversation on entrepreneurship, ways of addressing the missing middle.
Spread out across India’s small towns and cities, this is a class of entrepreneurs that have been hit by a triple wave over the last five years, buffeted first by the inadvertent fallout of demonetization, being unprepared for GST, and then by the endless pain of the covid-19 pandemic.
As we finally appear to be reaching some level of normality, now is the opportune time to identify the kind of industries that make up this layer, the opportunities they should be afforded, and the best ways to scale up their functioning in the shortest time frame.
But, why pay so much attention to these industries when we should be celebrating, as we do, our booming startup space?
It is indeed true that India has the third largest number of unicorns in the world now, adding 42 in 2021 alone. Braving all the disruptions of the pandemic, it was a year in which Indian startups raised $24.1 billion in equity investments, according to a NASSCOM-Zinnov report last year.
However, this is a story of lopsided growth.
The cities of Bengaluru, Delhi/NCR, and Mumbai together claim three-fourths of these startup deals while emerging hubs like Ahmedabad, Coimbatore, and Jaipur account for the rest.
This leap in the startup space has created 6.6 lakh direct jobs and a few million indirect jobs. Is that good enough for a country that sends 12 million fresh graduates to its workforce every year?
It doesn’t even make a dent on arguably our biggest unemployment in recent history—in April 2020 when the country shutdown to battle covid-19.
Technology-intensive start-ups are constrained in their ability to create jobs—and hybrid work models and artificial intelligence (AI) have further accelerated unemployment.
What we need to focus on, therefore, is the labour-intensive micro, small and medium enterprise (MSME). Here, we begin to get to a definitional notion of what we called the mundane middle and the problems it currently faces.
India has an estimated 63 million enterprises. But, out of 100 companies, 95 are micro enterprises—employing less than five people, four are small to medium and barely one is large.
The questions to ask are: why are Indian MSMEs failing to grow from micro to small and medium and then be spurred on to make the leap into large companies?
At the Global Alliance for Mass Entrepreneurship (GAME), we have advocated for a National Mission for Mass Entrepreneurship, the need for which is more pronounced now than ever before.
Whenever India has worked to achieve a significant economic milestone in a limited span of time, it has worked best in mission mode. Think of the Green Revolution or Operation Flood.
From across various states, there are enough examples of approaches that work to catalyse mass entrepreneurship.
The introduction of entrepreneurship mindset curriculum (EMC) in schools through alliance mode of working by a number of agencies has shown significant improvement in academic and life outcomes.
Through creative teaching methods, students are encouraged to inculcate 21st century skills like creativity, problem solving, critical thinking and leadership which are not only foundational for entrepreneurship but essential to thrive in our complex world.
Udhyam Learning Foundation has been involved with the Government of Delhi since 2018 to help young people across over 1,000 schools to develop an entrepreneurial mindset.
One pilot programme introduced the concept of ‘seed money’ and saw 41 students turn their ideas into profit-making ventures. Other programmes teach qualities like grit and resourcefulness.
If you think these are isolated examples, consider some larger data trends.
The Observer Research Foundation and The World Economic Forum released the Young India and Work: A Survey of Youth Aspirations in 2018.
When asked which type of work arrangement they prefer, 49% of the youth surveyed said they prefer a job in the public sector.
However, 38% selected self-employment as an entrepreneur as their ideal type of job. The spirit of entrepreneurship is latent and waiting to be unleashed.
The same can be said for building networks of successful women entrepreneurs—so crucial when the participation of women in the Indian economy has declined to an abysmal 20%.
The majority of India’s 63 million firms are informal —fewer than 20% are registered for GST.
Research shows that companies that start out as formal enterprises become two-three times more productive than a similar informal business.
So why do firms prefer to be informal? In most cases, it’s because of the sheer cost and difficulty of complying with the different regulations.
We have academia and non-profits working as ecosystem enablers providing insights and evidence-based models for growth. We have large private corporations and philanthropic and funding agencies ready to invest.
It should be in the scope of a National Mass Entrepreneurship Mission to bring all of them together to work in mission mode so that the gap between thought leadership and action can finally be bridged.
Heat wave is a condition of air temperature which becomes fatal to human body when exposed. Often times, it is defined based on the temperature thresholds over a region in terms of actual temperature or its departure from normal.
Heat wave is considered if maximum temperature of a station reaches at least 400C or more for Plains and at least 300C or more for Hilly regions.
a) Based on Departure from Normal
Heat Wave: Departure from normal is 4.50C to 6.40C
Severe Heat Wave: Departure from normal is >6.40C
b) Based on Actual Maximum Temperature
Heat Wave: When actual maximum temperature ≥ 450C
Severe Heat Wave: When actual maximum temperature ≥470C
If above criteria met at least in 2 stations in a Meteorological sub-division for at least two consecutive days and it declared on the second day
It is occurring mainly during March to June and in some rare cases even in July. The peak month of the heat wave over India is May.
Heat wave generally occurs over plains of northwest India, Central, East & north Peninsular India during March to June.
It covers Punjab, Haryana, Delhi, Uttar Pradesh, Bihar, Jharkhand, West Bengal, Odisha, Madhya Pradesh, Rajasthan, Gujarat, parts of Maharashtra & Karnataka, Andhra Pradesh and Telengana.
Sometimes it occurs over Tamilnadu & Kerala also.
Heat waves adversely affect human and animal lives.
However, maximum temperatures more than 45°C observed mainly over Rajasthan and Vidarbha region in month of May.
a. Transportation / Prevalence of hot dry air over a region (There should be a region of warm dry air and appropriate flow pattern for transporting hot air over the region).
b. Absence of moisture in the upper atmosphere (As the presence of moisture restricts the temperature rise).
c. The sky should be practically cloudless (To allow maximum insulation over the region).
d. Large amplitude anti-cyclonic flow over the area.
Heat waves generally develop over Northwest India and spread gradually eastwards & southwards but not westwards (since the prevailing winds during the season are westerly to northwesterly).
The health impacts of Heat Waves typically involve dehydration, heat cramps, heat exhaustion and/or heat stroke. The signs and symptoms are as follows:
1. Heat Cramps: Ederna (swelling) and Syncope (Fainting) generally accompanied by fever below 39*C i.e.102*F.
2. Heat Exhaustion: Fatigue, weakness, dizziness, headache, nausea, vomiting, muscle cramps and sweating.
3. Heat Stoke: Body temperatures of 40*C i.e. 104*F or more along with delirium, seizures or coma. This is a potential fatal condition.
Norman Borlaug and MS Swaminathan in a wheat field in north India in March 1964
Political independence does not have much meaning without economic independence.
One of the important indicators of economic independence is self-sufficiency in food grain production.
The overall food grain scenario in India has undergone a drastic transformation in the last 75 years.
India was a food-deficit country on the eve of Independence. It had to import foodgrains to feed its people.
The situation became more acute during the 1960s. The imported food had to be sent to households within the shortest possible time.
The situation was referred to as ‘ship to mouth’.
Presently, Food Corporation of India (FCI) godowns are overflowing with food grain stocks and the Union government is unable to ensure remunerative price to the farmers for their produce.
This transformation, however, was not smooth.
In the 1960s, it was disgraceful, but unavoidable for the Prime Minister of India to go to foreign countries with a begging bowl.
To avoid such situations, the government motivated agricultural scientists to make India self-sufficient in food grain production.
As a result, high-yield varieties (HYV) were developed. The combination of seeds, water and fertiliser gave a boost to food grain production in the country which is generally referred to as the Green Revolution.
The impact of the Green Revolution, however, was confined to a few areas like Punjab, Haryana, western Uttar Pradesh in the north and (unified) Andhra Pradesh in the south.
Most of the remaining areas were deficit in food grain production.
Therefore the Union government had to procure food grain from surplus states to distribute it among deficit ones.
At the time, farmers in the surplus states viewed procurement as a tax as they were prevented from selling their surplus foodgrains at high prices in the deficit states.
As production of food grains increased, there was decentralisation of procurement. State governments were permitted to procure grain to meet their requirement.
The distribution of food grains was left to the concerned state governments.
Kerala, for instance, was totally a deficit state and had to adopt a distribution policy which was almost universal in nature.
Some states adopted a vigorous public distribution system (PDS) policy.
It is not out of place to narrate an interesting incident regarding food grain distribution in Andhra Pradesh. The Government of Andhra Pradesh in the early 1980s implemented a highly subsidised rice scheme under which poor households were given five kilograms of rice per person per month, subject to a ceiling of 25 kilograms at Rs 2 per kg. The state government required two million tonnes of rice to implement the scheme. But it received only on one million tonne from the Union government.
The state government had to purchase another million tonne of rice from rice millers in the state at a negotiated price, which was higher than the procurement price offered by the Centre, but lower than the open market price.
A large number of studies have revealed that many poor households have been excluded from the PDS network, while many undeserving households have managed to get benefits from it.
Various policy measures have been implemented to streamline PDS. A revamped PDS was introduced in 1992 to make food grain easily accessible to people in tribal and hilly areas, by providing relatively higher subsidies.
Targeted PDS was launched in 1997 to focus on households below the poverty line (BPL).
Antyodaya Anna Yojana (AAY) was introduced to cover the poorest of the poor.
Annapoorna Scheme was introduced in 2001 to distribute 10 kg of food grains free of cost to destitutes above the age of 65 years.
In 2013, the National Food Security Act (NFSA) was passed by Parliament to expand and legalise the entitlement.
Conventionally, a card holder has to go to a particular fair price shop (FPS) and that particular shop has to be open when s/he visits it. Stock must be available in the shop. The card holder should also have sufficient time to stand in the queue to purchase his quota. The card holder has to put with rough treatment at the hands of a FPS dealer.
These problems do not exist once ration cards become smart cards. A card holder can go to any shop which is open and has available stocks. In short, the scheme has become card holder-friendly and curbed the monopoly power of the FPS dealer. Some states other than Chhattisgarh are also trying to introduce such a scheme on an experimental basis.
More recently, the Government of India has introduced a scheme called ‘One Nation One Ration Card’ which enables migrant labourers to purchase rations from the place where they reside. In August 2021, it was operational in 34 states and Union territories.
The intentions of the scheme are good but there are some hurdles in its implementation which need to be addressed. These problems arise on account of variation in:
It is not clear whether a migrant labourer gets items provided in his/her native state or those in the state s/he has migrated to and what prices will s/he be able to purchase them.
The Centre must learn lessons from the experiences of different countries in order to make PDS sustainable in the long-run.
For instance, Sri Lanka recently shifted to organic manure from chemical fertiliser without required planning. Consequently, it had to face an acute food shortage due to a shortage of organic manure.
Some analysts have cautioned against excessive dependence on chemical fertiliser.
Phosphorus is an important input in the production of chemical fertiliser and about 70-80 per cent of known resources of phosphorus are available only in Morocco.
There is possibility that Morocco may manipulate the price of phosphorus.
Providing excessive subsidies and unemployment relief may make people dependent, as in the case of Venezuela and Zimbabwe.
It is better to teach a person how to catch a fish rather than give free fish to him / her.
Hence, the government should give the right amount of subsidy to deserving people.
The government has to increase livestock as in the case of Uruguay to make the food basket broad-based and nutritious. It has to see to it that the organic content in the soil is adequate, in order to make cultivation environmentally-friendly and sustainable in the long-run.
In short, India has transformed from a food-deficit state to a food-surplus one 75 years after independence. However, the government must adopt environmental-friendly measures to sustain this achievement.