The National Food Security Act, 2013, has met with prolonged political indifference, but there is some hope now since the Centre has been asked by the Supreme Court to ensure that States implement key aspects of the progressive law.
The directives in the Swaraj Abhiyan case underscore the depressing reality that several State governments have not met key requirements in the legislation which empower the common person in securing subsidised food.
Sections 14, 15 and 16, which require the setting up of a grievance redressal mechanism and a State Food Commission with responsibility to monitor the implementation of the law, have been heeded only in name, as in Haryana, or not at all.
As the court has pointed out, Article 256, which casts a responsibility on the States and the Union to ensure compliance with laws made by Parliament, also provides the remedy, as it can be invoked by the Centre to set things right. Unfortunately, the NFSA, which is vital for social security through the Public Distribution System and child welfare schemes, has suffered due to a lack of political will.
As a law with egalitarian goals, the NFSA should have set the floor for food security through the principle of universal access, though not every citizen would need it. There is great merit in providing highly subsidised foodgrains to targeted households chosen by the State governments, with a ceiling of 75% of the population in rural areas and 50% in urban areas.
But the system should have in-built mechanisms to allow for the entry of new households that suddenly find themselves in financial distress, while others can exit it based on changed circumstances.
Such arrangements can be made only when there is a full-fledged, independent machinery in the form of a Food Commission, and district-level grievance redressal, besides social audits. All these are provided for under the Act, but have been ignored.
Modernisation of the PDS, with the use of information technology, could incorporate such dynamic features to the supply of subsidised food to those who need it, and eliminate deficiencies and fraud.
Now that the Ministry of Consumer Affairs, Food and Public Distribution has been given specific directives by the court to complete the unfinished tasks this year, it should make up for lost time.
As is widely acknowledged, some States are better at running the PDS than others, and the food security law is the best tool to raise standards uniformly.
Food Ministry data presented to Parliament show that the present system does not reflect the true scale of public grievances, with a mere 1,106 complaints received from beneficiaries nationwide in 2016, including those reported in the media. The court’s intervention is wholly welcome to make the NFSA meaningful.
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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.