The Outsider Posted August 28, 2013 Posted August 28, 2013 I am amazed that no one is asking "who will pay for it ? " its a huge mess as govt will buy rice at market rate and sell it for less than 10% price. Who will pay for 90% and for how long ? I am shocked that even on ICF posters living in India are not asking this question If the implementation is right, which never is, the money being talked about is not an astronomical amount. There are varying estimates for the additional amounts needed, but none are insurmountable. The government keeps on giving increasing subsidies to fertilizer and petroleum products. But if the price of petrol, LPG, or diesel is increased it suddenly becomes a problem. Indian middle and upper class keep buying increasing quantity of gold worth an insane amount of $50 billion in a year at an import duty of 2%, but expect the government to wave a magic wand to solve the problems. Raising the import duty on Gold to 10% itself will generate around 30,000 crore from my back of the envelope calculation. But people are up in arms when that happened. There are many more ways to fund it like the people of India honestly paying taxes for a start.
Desi Cartman Posted August 28, 2013 Posted August 28, 2013 I was aware of the low GDP per capita and low tax rates. Check this out for unemployment benefits in different countries. There are many countries with substantially lower GDP per capita than the US who give substantial benefits. In US, The average weekly payment is $293. Multiply by 4.5 for avg monthly payment, then multiply by exchange rate(65) 293*4.5*65 = 85702 rupees per month Even after taking low GDP per capita(nominal not ppp) and low tax rates in account, the sum of Rs. 1000/820 for Indians is small only. No, even these developed countries are struggling. EU was ahead in all this and most countries in EU are messed up. Only resource rich countries like Aus have a balanced budget and even they have to charge high taxes. The problem is that India doesnt have money. We dont have enough people who pay taxes and enough businesses which can be taxed to pay for this and by announcing this at the time when the economy is in tatters, the govt hasnt done any good to anybody.
diga Posted August 28, 2013 Posted August 28, 2013 If the implementation is right, which never is, the money being talked about is not an astronomical amount. There are varying estimates for the additional amounts needed, but none are insurmountable. The government keeps on giving increasing subsidies to fertilizer and petroleum products. But if the price of petrol, LPG, or diesel is increased it suddenly becomes a problem. Indian middle and upper class keep buying increasing quantity of gold worth an insane amount of $50 billion in a year at an import duty of 2%, but expect the government to wave a magic wand to solve the problems. Raising the import duty on Gold to 10% itself will generate around 30,000 crore from my back of the envelope calculation. But people are up in arms when that happened. There are many more ways to fund it like the people of India honestly paying taxes for a start. The expense on food bill may not be so much, but the increase in the already high current account deficit is .. I am not sure if this was the right time to pass the bill with economy in such state, but I guess election politics will override any economic sense
Desi Cartman Posted August 28, 2013 Posted August 28, 2013 If the implementation is right' date=' which never is, the money being talked about is not an astronomical amount. There are varying estimates for the additional amounts needed, but none are insurmountable. [/quote'] What are the chances of that happening, just the idea of paying 10 times for a commodity than what you are selling it, plus allowing it for 80% janta means that there will be a massive volume and govt alone will control prices which means that every few months they will increase the prices to please the farmers. SP is already talking about increasing the prices paid and guess who will make the maximum from this, Sharad Pawar type people right ? A Govt's other policies or lack of them is forcing INR to go down which means that petrol gas etc will go up. So they are subsidizing for their policy failure. For example coal, India has enough of it and has even sold the mines but then FM declares there is no fraud and no harm done as its not taken out. Its a status symbol and off late I have seen that Indian women like to wear an extra chain or 2 with a heavy set. Its a symbol, people think they are asset rich and buy more gold to show off. Absolutely, if people paid taxes then a lot of these issues would have been resolved many decades ago but sadly it doesnt happen. Then we have politicians who themselves are thugs and help people resolve tax cases. I have not found an article which explains the cost of this scheme so if anyone can post that or explain then I will really appreciate. I think I sound like an American Republican but here I am just shocked how people are ok with Govt controlling food for 80% of the janta and why ration system wasnt enough.
The Outsider Posted August 28, 2013 Posted August 28, 2013 ^ I'll try to post some links tomorrow, but roughly speaking the numbers range from (around Rs. 85,000 crore is already accounted for through previous subsidies): 1. Government's estimates of around Rs. 1,25,000 crores, so that's an additional Rs. 45,000 crore which has already been accounted for in this year's budget and fiscal deficit. 2. Some very high figures of around Rs. 6,00,000 crores over a 3 year period. I think the number would be somewhere around the Rs. 1,50,000 crore range. As for the Rupee, the government is only partly to blame. Just take a look around at the currencies of all emerging markets.
diga Posted August 28, 2013 Posted August 28, 2013 India today article on food bill The new Bill extends the current entitlement by reducing prices and giving the entitlement a legal status. The timing of the legislation can indeed be seen as one of the efforts of the UPA to woo voters. In some ways it can be likened to the Rs.52,000 crore Loan Waiver Scheme of the UPA I ahead of the 2009 Lok Sabha elections. The Congress-led UPA II government had promised to implement the Food Security Bill within 100 days of forming a government in 2009. However, unproductive Parliament sessions and a focus on other issues have delayed its implementation. "Given that India will hold five state elections in Q4 of 2013 and general elections in early 2014, the Congress likely wants to deliver on this promise as soon as possible", Standard Chartered points out. A beneficiary can demand rice at Rs.3/kg, wheat at Rs.2/kg and coarse cereals at Rs.1/kg. The scheme offers a uniform monthly entitlement of five kg grains for up to 75 per cent of the rural population and up to 50 per cent of the urban population. The entitlement of Antodaya Anna Yojana households - the poorest of the poor - will, however, continue at 35kg per month. The right cannot be claimed if there is a war, flood, drought, fire, cyclone or earthquake affecting supplies. The prices of the grains will remain the same for a three year period after which they may undergo revision. The government may in future look at schemes of cash transfers or food coupons to beneficiaries in place of the grain entitlement. Pregnant women and lactating mothers, besides being entitled to nutritious meals as per the prescribed nutritional norms, will also receive maternity benefit of at least of Rs.6,000. Children in the age group of six months to 14 years will be entitled to take home ration or hot cooked food as per prescribed nutritional norms. Like all welfare schemes, this one too will cost a good deal - much more than what is being projected. According to the government's calculations, the additional annual food subsidy implication will be about Rs.23,800 crore over the estimated food subsidy requirement under the existing Public Distribution System and other welfare schemes. The centre's total food subsidy, at 2013/14 costs, will be Rs.124,747 crore annually. According to an analysis by Standard Chartered, the fiscal impact will not exceed 0.1-0.15 per cent of GDP in FY14, most of which has already been factored into the budget. l
randomGuy Posted August 28, 2013 Posted August 28, 2013 No' date=' even these developed countries are struggling. EU was ahead in all this and most countries in EU are messed up. Only resource rich countries like Aus have a balanced budget and even they have to charge high taxes. The problem is that India doesnt have money. We dont have enough people who pay taxes and enough businesses which can be taxed to pay for this and by announcing this at the time when the economy is in tatters, the govt hasnt done any good to anybody.[/quote'] I am talking abt re-structuring the social benefit schemes, not talking about adding expenditure. I have mentioned abt abolishing food and fuel subsidy. That will save us some 2.5 lac crore per year, redistribute that money or whatever is fiscally manageable , as unconditional cash benefits.
ravishingravi Posted August 28, 2013 Posted August 28, 2013 Yashwant Sinha only one who opposes the Food bill. Labels it fiscal disaster.
Desi Cartman Posted August 28, 2013 Posted August 28, 2013 I am talking abt re-structuring the social benefit schemes' date=' not talking about adding expenditure. I have mentioned abt abolishing food and fuel subsidy. That will save us some 2.5 lac crore per year, redistribute that money or whatever is fiscally manageable , as unconditional cash benefits.[/quote'] yes, I dont really mind a system where unemployed seeking employment or disabled get benefits and yes cash benefits is better than these other schemes as they have the lowest cost to maintain and implement. The problem with Indian system is that as soon as its released majority of Indians and everybody who has a dukaan will declare himself as unemployed or disabled, for this the govt needs to be very strict and honest which is not the case with GOI.
Desi Cartman Posted August 28, 2013 Posted August 28, 2013 ^ I'll try to post some links tomorrow, but roughly speaking the numbers range from (around Rs. 85,000 crore is already accounted for through previous subsidies): 1. Government's estimates of around Rs. 1,25,000 crores, so that's an additional Rs. 45,000 crore which has already been accounted for in this year's budget and fiscal deficit. 2. Some very high figures of around Rs. 6,00,000 crores over a 3 year period. I think the number would be somewhere around the Rs. 1,50,000 crore range. As for the Rupee, the government is only partly to blame. Just take a look around at the currencies of all emerging markets. I finally found something by googling Food Security Bill Disaster lol http://goo.gl/IxN4I0 some truth to the below Rajiv Kumar and Soumya Kanti Ghosh (Subsidy: It Will Not Stop at Rs. 60,000 Crore, Indian Express, 15 February, 2012 and Last Straw on the Fisc Back, Indian Express 16 February, 2012) made a more conservative estimate, which did not include the infrastructure and logistics costs of implementing the Act and still came up with estimates of Rs 1.43 lakh crore in the first year rising to Rs 1.62 lakh crore in the third year. To say that the FSB is simply a re-structuring of existing PDS schemes and will not raise the fiscal burden is simply being disingenuous. These are huge magnitudes amounting to 1.5 per cent of the GDP at the minimum and 2.4 per cent of the GDP at the higher end. This will double the total subsidy bill and put extraordinary pressure on the fiscal balance. There are multiple costs of this fiscal profligacy for the poor. They will suffer from inflation, which will be a necessary consequence of fiscal expansion and the attendant leakages which are estimated to be at least 40 per cent of the total bill.
randomGuy Posted August 28, 2013 Posted August 28, 2013 yes' date=' I dont really mind a system where unemployed seeking employment or disabled get benefits and yes cash benefits is better than these other schemes as they have the lowest cost to maintain and implement. The problem with Indian system is that as soon as its released majority of Indians and everybody who has a dukaan will declare himself as unemployed or disabled, for this the govt needs to be very strict and honest which is not the case with GOI.[/quote'] I understand your point. There will be many un-deserving people who will also take benefits, but its still vastly better than current system, where even to get ration cards one has to pay bribes, everybody including the rich get fuel subsidy, there is leakage, corruption, inaction, mismanagement at every level. My guess is it will mostly be the poor who will stand in queues for long time every month to get the small-ish amount (1000/- or 820/-). One can stipulate rules like No central or state Gov. employees or people who have earned more than 'x' amount in last financial year can avail cash benefits. One can also associate PAN card number with the biometric data to enforce these rules. Many more methods can be thought of.
ravishingravi Posted August 28, 2013 Posted August 28, 2013 Sonia’s food bill will bring great pain, bankruptcy… and reform http://www.firstpost.com/economy/sonias-food-bill-will-bring-great-pain-bankruptcy-and-reform-1063423.html
Desi Cartman Posted August 28, 2013 Posted August 28, 2013 I understand your point. There will be many un-deserving people who will also take benefits, but its still vastly better than current system, where even to get ration cards one has to pay bribes, everybody including the rich get fuel subsidy, there is leakage, corruption, inaction, mismanagement at every level. My guess is it will mostly be the poor who will stand in queues for long time every month to get the small-ish amount (1000/- or 820/-). One can stipulate rules like No central or state Gov. employees or people who have earned more than 'x' amount in last financial year can avail cash benefits. One can also associate PAN card number with the biometric data to enforce these rules. Many more methods can be thought of. Just like always to empower women, in a normal society and country special laws are not needed we shouldnt need special laws. The bottom line is that I know personally people who have worked in banks and have used their yearly travel allowance to visit hometown bhatinda from Delhi via Dubai. All these were sarkari people and has been happening for many many years. My rishtedar from a very high govt post was almost humiliated and called a darpook by other sarkari people because he said "its not the right thing to do" others said chutia hai. Now its an open secret but when I knew about this and even MPs were doing this, dont you think the govt officals knew it. The point that Im making is that govt is there to keep a check but our sarkar itself is corrupt hence these checks are useless. In principle, I agree with you but India has nothing which can help it enforce these logical solutions. Our courts are a sham, police is pathetic, politicians are world known for douchebaggery, civil servants are almost forced to be corrupt if they are not by choice so tell me what is left ? From people not stopping on traffic signals to poor farmers committing suicide and sugar mill owners in the same state like Sharad Pawar making billions, what is left ? I'm really saddened as I dont see hope.
ravishingravi Posted August 28, 2013 Posted August 28, 2013 Thousands of Bangladeshis cross into India as Lok Sabha passes Food Security Bill http://www.fakingnews.firstpost.com/2013/08/thousands-of-bangladeshis-cross-into-india-as-lok-sabha-passes-food-security-bill/ :hysterical:
Desi Cartman Posted August 28, 2013 Posted August 28, 2013 Rupee tumbles to new all-time low of 68.75; sensex down NOT faking news
randomGuy Posted August 28, 2013 Posted August 28, 2013 Desi Cartman arrey yar, here is where modern technology comes to rescue. Today we can verify and store biometric data on cloud (as in cloud computing). Use a cheap device like a micro-Atm among other device for verification purposes. This was not possible as early as even 4-5 years back. There is very little scope of mismanagement, leakage, inaction by gov. employees and corruption in cash benefit scheme using biometric verification. Make a proven guy like a Nandan Nilekani or a Sreedharan the head of such a project. Trust me, its do-able and not that tough either..
asterix Posted August 28, 2013 Author Posted August 28, 2013 Thousands of Bangladeshis cross into India as Lok Sabha passes Food Security Bill http://www.fakingnews.firstpost.com/2013/08/thousands-of-bangladeshis-cross-into-india-as-lok-sabha-passes-food-security-bill/ :hysterical: :hysterical: :hysterical:
saneindian Posted August 28, 2013 Posted August 28, 2013 Desi Cartman arrey yar, here is where modern technology comes to rescue. Today we can verify and store biometric data on cloud (as in cloud computing). Use a cheap device like a micro-Atm among other device for verification purposes. This was not possible as early as even 4-5 years back. There is very little scope of mismanagement, leakage, inaction by gov. employees and corruption in cash benefit scheme using biometric verification. Make a proven guy like a Nandan Nilekani or a Sreedharan the head of such a project. Trust me, its do-able and not that tough either.. Trying taking those technologies to thousands of villages in Bihar, UP, Bengal, Orissa, Jharkhand,MP and C'garh which do not have proper road connectivity, no electricity etc. Forget those villages, the 'advanced technologies' used for making of Aadhar cards / voter id cards even in Metro cities have at best a success rate of 65-70%. On making Nilekani or Sreedharan head of such an authority, Nilekani does head the Aadhar card issuing authority and the entire implementation has been full of mismanagement, leakage, inaction by gov. employees and corruption- exactly the problems it was supposed to tackle.
randomGuy Posted August 28, 2013 Posted August 28, 2013 ^ what are you talking abt? Aadhar has been a success barring small issues. ~40 cr people have already given their address/DoB proofs without any monetary gains and have their UIDs generated. one can just take print out of the card from their website which is as good as the lost/undelivered card. This will be useful for disbursal of social security benefits and made mandatory and sufficient identity proof for various KYC(know your customer) forms like for opening bank a/c, getting SIM card, registering vehicles, immovable property etc. Its a national scheme in here, the card is applicable in all states. Check their website and this section for the stats(updated daily). Watch video where Nandan explains how it works anywhere, you don't even need electricity. Just need internet which is ubiquitous in India.
saneindian Posted August 28, 2013 Posted August 28, 2013 ^ what are you talking abt? Aadhar has been a success barring small issues. ~40 cr people have already given their address/DoB proofs without any monetary gains and have their UIDs generated. one can just take print out of the card from their website which is as good as the lost/undelivered card. This will be useful for disbursal of social security benefits and made mandatory and sufficient identity proof for various KYC(know your customer) forms like for opening bank a/c, getting SIM card, registering vehicles, immovable property etc. Its a national scheme in here, the card is applicable in all states. Check their website and this section for the stats(updated daily). Watch video where Nandan explains how it works anywhere, you don't even need electricity. Just need internet which is ubiquitous in India. 40 crores out of 1.2 billion is roughly 35% coverage! And I am sure the coverage %age is states like Bihar, UP, Bengal, MP, C-Garh, Orissa, North East etc will be even lower. And those are the states where the maximum number of beneficiaries of FSB reside. It's a bit like the Golden Quatrilateral project, which after its 2002 lanch, had a 50% completion by 2004 but got stuck at 70-75% by around 2007-08 as progress in the states mentioned above got stuck. Also, the accuracy of the information in the Adhar Card itself is suspect. If you are willing to pay 2000 rs, anyone can get an Aadhar card for a desired address. As for internet being ubiquitous, as someone who regularly travels to interiors of India, unfortunately my personal experience has been completely different. Connectivity is an issue even in semi urban areas (10-15 kms away from towns), forget the rural areas.
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