Food bill: will it be passed today by Parliament?

[Clarke]

Why would making the tax net better be explicitly mentioned in the food bill? :dontknow:

I would think funding gigantic schemes would be part of the plan. I didn't know dekhte hain was the official way of going about it.

Import duty on gold has already been increased and that itself will provide an additional revenue in the Rs. 30,000 crore range.

A quick word of caution: foregone revenue isn't always actual revenue. Raising duties or removing theoretical subsidies will often have a market effect.

What makes you so certain? There are economists on either side of the discussion.

Could I be more obvious ? We'll be throwing foodgrains to 800 million people now, maybe a billion later. I'm sure economics wasn't a banned topic in USSR, Maoist China or License Raj India. You'll have the usual suspects shouting about more spending no matter what is done.

[The Outsider]

I would think funding gigantic schemes would be part of the plan. I didn't know dekhte hain was the official way of going about it.

The government has already accounted for its first year expense in the budget. The deficit numbers already include the additional expenditure from the bill

A quick word of caution: foregone revenue isn't always actual revenue. Raising duties or removing theoretical subsidies will often have a market effect.

Yes I know. However given Indian middle and upper class' lust for gold I don't expect demand to go down substantially with what is still a relatively cheap import duty at 10%. If not Rs. 30,000 crore we can certainly expect to net Rs. 20,000-25,000 crore.

Could I be more obvious ? We'll be throwing foodgrains to 800 million people now, maybe a billion later. I'm sure economics wasn't a banned topic in USSR, Maoist China or License Raj India. You'll have the usual suspects shouting about more spending no matter what is done.

I don't think Amartya Sen and Jean Dreze are "usual suspects" and certainly don't belong to USSR, Maoist China, or License Raj India.

[Crookbond]

Why does the FM need to come out with this statement ?

Err .... because the food security bill doesn't affect the current fiscal deficit.

[Desi Cartman]

Food bill: will it be passed today by Parliament? Wow this BS seems never ending. Now the govt wants to buy 2.5cr mobiles for the poor and give then away for 300 RS and include some basic call text and interwebz data and tablets with data for muft. Truly what the country needs when it's economy is ****ed. http://m.timesofindia.com/india/Govt-plans-to-give-2-5-crore-mobile-phones-90-lakh-tablets-free/articleshow/22385535.cms NEW DELHI: In another mega scheme to woo the poor, the Centre proposes to spend Rs 7,860 crore distributing 2.5 crore mobile phones and 90 lakh tablets virtually free of cost to targeted beneficiaries over the next four years starting 2014-15, in the name of bridging the digital divide in the country. The mobile phones will come bundled with free connection charges for two years. The user, who will have to pay a one-time charge of Rs 300, will also get 30 minutes of talk time, 30 text messages and 30 Mb of data usage free per month. This scheme will be restricted to the rural population. Similarly, tablets will be given away to students of classes XI and XII, both in rural and urban areas. These gadgets will have free data card connection for two years. The proposal has been sent to the telecom commission by the department of telecommunication (DoT). After it's approved by the commission, the plan will be sent to the Union cabinet.

[saneindian]

Since the scheme will go off next year - how is it impacting the fiscal deficit this year? :dontknow:

The massive propaganda campaign unleashed by Congress with the tagline "Bhookh ab itihaas banegi" alone will dent the fiscal deficit by 100 bps :--D

[Clarke]

The government has already accounted for its first year expense in the budget. The deficit numbers already include the additional expenditure from the bill

That's what they say all the time, and how often do they stick to their stated targets ? The very fact that the FM needs to come out to reassure everyone states the weaknesses in govt finances. The larger point of course is every govt has to keep dealing with a bigger bill till the end of time.

I don't think Amartya Sen and Jean Dreze are "usual suspects" and certainly don't belong to USSR, Maoist China, or License Raj India.

Yeah, like they or for that matter you will go against the Rajmata's vote bank politics. **** me, our PM is a well qualified economist. One would think he would know of the problems that came up 22 years back and could help us avoid them.

[Clarke]

Err .... because the food security bill doesn't affect the current fiscal deficit.

Its just another bloody promise from the FM. Its strange how some of you lap up whatever a secular politican announces in the election year.

[randomGuy]

1. The problem facing India right now is the current account deficit due to lack of investments, reforms, rampant corruption, incompetence, which forces us to put a cap on all expenditure including the spending on social security. If it were the deficit which was to be funded in long term, we would have been just fine. So, blame the Gov. for the current situation. 2. The assertion that any country simply can not afford to procure food grains from its farmers and sell it on subsidized rates to 2/3rd (800 million) of its population because only 'x' percentage pay income tax as explanation is quite wrong. Besides the 247639.00 crores of income tax earnings, there's also: 419520.00 crores coming as Corporation Tax. 187308.00 crores as Customs. 197553.95 crores as Union Excise Duties. 180141.00 crores as service tax. Link

[Clarke]

2. The assertion that any country simply can not afford to procure food grains from its farmers and sell it on subsidized rates to 2/3rd (800 million) of its population because only 'x' percentage pay income tax as explanation is quite wrong. Besides the 247639.00 crores of income tax earnings, there's also: 419520.00 crores coming as Corporation Tax. 187308.00 crores as Customs. 197553.95 crores as Union Excise Duties. 180141.00 crores as service tax. Link

Who pays all those taxes ? The y which is a disjoint set from x ? Of course, a country can afford all that it wants while drafting legislation; you might as well imply a 90% tax on all industrial profits to fund another scheme. See how that works out for the economy in the longer term. The term subsidy in this context is a misnomer. Its not 10-20% off, its almost free.

[randomGuy]

Who pays all those taxes ? The y which is a disjoint set from x ? Of course, a country can afford all that it wants while drafting legislation; you might as well imply a 90% tax on all industrial profits to fund another scheme. See how that works out for the economy in the longer term. The term subsidy in this context is a misnomer. Its not 10-20% off, its almost free.

1. Yaar People do not disclose their correct incomes so as to not pay income tax. However those same people who do not pay income taxes properly do pay other direct and indirect taxes (much because they aren't able to find any workaround to avoid those taxes :cantstop:). 2. The PDS schemes in various states, the mid-day meal program - these have been on-going before the food security bill and giving a coverage of 800 million already. Btw I wanted to tell you I value your points alot on different topics including this topic.

[Clarke]

1. Yaar People do not disclose their correct incomes so as to not pay income tax. However those same people who do not pay income taxes properly do pay other direct and indirect taxes (much because they aren't able to find any workaround to avoid those taxes :cantstop:).

Fair enough, but x & y are not disjoint and their cumulative will be single digits percentage of the population.

2. The PDS schemes in various states, the mid-day meal program - these have been on-going before the food security bill and giving a coverage of 800 million already.

You have sources to support the claim that 800 million were already covered ? I'll skip the already discussed matter about the problems of having it as a national law.

Btw I wanted to tell you I value your points alot on different topics including this topic.

Thanks, heartening to see additional support for fascists :bow:

[randomGuy]

Fair enough' date=' but x & y are not disjoint and their cumulative will be single digits percentage of the population.[/quote'] Each and every Indian pays taxes on goods and services. We shouldn't say because only a few people pay income tax, we can't possibly afford food security. I'd really like for you to watch http://www.youtube.com/watch?v=7mdJRZeilT8video from ravishingRavi based on which I had made these 2 posts - post 1 post 2 Watch from 15m 20 secs to answer your specific question. :icflove: I am a fellow fascist. But seriously the points you give and your style of posting is quite good.

[Clarke]

Each and every Indian pays taxes on goods and services. We shouldn't say because only a few people pay income tax' date=' we can't possibly afford food security.[/quote'] I have a massive problem with this system of lumping. If everyone throws a penny in the wishing well and obtains a silver bar in return, those pennies don't really add up very much, which is pretty evident from our financial situation. DM has been making a similar point about it being included in the current budget. The trouble there is FMs rarely stick to their claims of achieving goals on spending and deficits. If I may add, I'd have a problem with the budget itself. The food subsidy increased more than 25 times from 1991-92 to 2011-12 from ~2500 crore to ~72000 crore. The situation since then hasn't improved and here we are looking to double that expenditure in 3 years and further in the future.

[randomGuy]

I have a massive problem with this system of lumping. If everyone throws a penny in the wishing well and obtains a silver bar in return' date=' those pennies don't really add up very much, which is pretty evident from our financial situation.[/quote'] Sure, but food security is not a silver bar. Our financial situation is due failure of our gov mantris - lack of reforms, pro-activeness,lack of luring investors, helping industry/manufacturing, rampant corruption, incompetence resulting into lack of investments and of 5% current account deficit. Just to give a small example of the effect of reform - Raghuram Rajan, upon his arrival, announced some banking reforms along with other reforms, the sensex reached 19.5 K from 17.xx K and the rupee reached 65 per dollar from 68. Likewise we require young, honest, pro-active and competent mantris. Check this . The overall budgeted expenditure was more than the actual expenditure for FY 2012-13. Food subsidy was a little (10k crore) more than budget-ed I concede. Petroleum subsidy was significantly more. We are only talking food subsidy here. Different countries have different models, Many spend 6% of expenditure on healthcare. We have spent 1.5% on it for many years. Many spend 5-6% on education, we spend only 3%. But we spend more on food subsidy. Take into account how many folds our GDP, our population and the inflation has grown from 1991 to 2011. So, I wouldn't even compare what we spent in 1991 or what other countries spend on food subsidy. But Ofcourse, if you ask me, I will abolish all food, fuel subsidy, MNREGA and spend all of it on cash benefits based on biometric/DNA/any-proven-technology-based verification.

[Crookbond]

Food bill: will it be passed today by Parliament?

Its just another bloody promise from the FM. Its strange how some of you lap up whatever a secular politican announces in the election year.

Huh? Even if the FM hadn't said it - it would still be true. I never alleged you in this discussion of being fekular but you find it very appropriate to indulge in ad hominems

[The Outsider]

That's what they say all the time, and how often do they stick to their stated targets ? The very fact that the FM needs to come out to reassure everyone states the weaknesses in govt finances. The larger point of course is every govt has to keep dealing with a bigger bill till the end of time.

If the fiscal policy was such a disaster with respect to deficit, as you are making it out to be how are we still below the 5% deficit to GDP ratio, which is considered healthy by all economists for developing countries? There are many things on which the government should have acted in a more proactive manner, but with regards to the deficit to GDP ratio I don't see a rationale to fault them, which seems to be your main concern with regards to the food bill.

Yeah, like they or for that matter you will go against the Rajmata's vote bank politics. **** me, our PM is a well qualified economist. One would think he would know of the problems that came up 22 years back and could help us avoid them.

Have you considered the alternative that maybe they do know better than you or is your hatred for Rajmata and her vote bank driving your entire thinking?

[Clarke]

If the fiscal policy was such a disaster with respect to deficit, as you are making it out to be how are we still below the 5% deficit to GDP ratio, which is considered healthy by all economists for developing countries? There are many things on which the government should have acted in a more proactive manner, but with regards to the deficit to GDP ratio I don't see a rationale to fault them, which seems to be your main concern with regards to the food bill.

I'm sorry, spending 1.6 times your annual revenue is healthy ? I didn't get the memo. Beyond the deficit, I've made it pretty clear the idea appears to be straight out of a communist manual and sets a dangerous precedent. No sensible country throws foodgrains to two thirds of the population, leave aside its more than 800 million people. You can lump the rich and poor contributors and make horrible comparisons like medicare & SS but the above fact stands out.

Have you considered the alternative that maybe they do know better than you or is your hatred for Rajmata and her vote bank driving your entire thinking?

Hah! Have you considered that you're a congressi trying to defend whatever nonsense she plans to win vote banks ? For the record, Sen doesn't want Modi as PM but isn't very 'knowledgeable' about Rahul baba to decide on his suitability. MMS is keen on the latter. That pretty much shouts out loud about the partisanship of the eminent economists and the levels to which they stoop.

[The Outsider]

I'm sorry, spending 1.6 times your annual revenue is healthy ? I didn't get the memo.

How much does Amreeka, your model capitalist country, spend?

Beyond the deficit, I've made it pretty clear the idea appears to be straight out of a communist manual and sets a dangerous precedent. No sensible country throws foodgrains to two thirds of the population, leave aside its more than 800 million people. You can lump the rich and poor contributors and make horrible comparisons like medicare & SS but the above fact stands out.

No facts stood out in your arguments.

Hah! Have you considered that you're a congressi trying to defend whatever nonsense she plans to win vote banks ?

No, I haven't considered that possibility because I know I am not a Congressi.

For the record, Sen doesn't want Modi as PM but isn't very 'knowledgeable' about Rahul baba to decide on his suitability. MMS is keen on the latter. That pretty much shouts out loud about the partisanship of the eminent economists and the levels to which they stoop.

What's the partisanship? It's very logical - Modi has proved on the base of his past governance that he is not fit to become the PM and Rahul Gandhi has no past record to make a judgment this way or that.

[Clarke]

How much does Amreeka' date=' your model capitalist country, spend? [/quote'] That's a very bad comparison one more time. They pay a huge cost for borrowing the money. There is enough attention in politics such that one side has the deficit as the primary agenda. More importantly, they're a developed and advanced economy and don't need to bother about the necessary investments that we desperately need, have skipped and will continue to do so to afford the vote bank largesse. Besides, no self respecting American would demand that the govt provide food for two thirds of the population for free. In India we somehow expect the govt to provide even the bare essentials. Feel free to share some successful economies that fed two thirds of their population with free foodgrains by law, year after year. Remember, the issue here is FOOD. Not pension, not healthcare, the most primary requirement and the first expense one accounts for: FOOD. I rest my case :--D

[Crookbond]

Right to Food is not an alien concept and has been implemented by many countries around the world. http://www.fao.org/docrep/016/ap554e/ap554e.pdf