22
S
tate
of
I
ndia
’
s
L
ivelihoods
R
eport
2015
Food security (NFSA)
The Government of India appointed a com-
mittee to explore the restructuring of the
Food Corporation of India (FCI) which had
submitted its report. The committee recom-
mended a higher buffer stock, reducing cover-
age of people under the FSA from67 per cent
of the population to 40 per cent higher food
grain release for vulnerable households under
the public distribution system (PDS) and
removing the subsidies on fertilisers (Box 2.4).
There has been criticism that there is lack
of political will to implement the NFSA and
several administrative actions have been
taken to weaken the food entitlements that
secure lives. A more detailed coverage of
the issues in implementation of the food
security measures is provided in the follow-
ing chapter.
Regional Rural Banks (RRBs)
Amendment Act
The RRBs were set up to cater to the needs
of excluded populations in the rural areas,
especially for credit. Across the country, 196
banks have been established and over the last
five years, RBI has taken up a plan for con-
solidation of these banks into larger entities,
covering more districts and customers. The
merged entities would require additional
capital to expand their businesses and cus-
tomer outreach. The RRB Amendment bill
proposes to raise their authorised capital
from
`
5 crores to
`
20 billion. The share
capital of RRBs is currently held by the
central government, state governments and
various sponsor banks. The Amendment
proposes to allow the banks to raise equity
from other willing investors as well. In
effect, this would mean that the private
sector shareholders could also hold equity
in RRBs and depending on the extent of
shareholding, elect directors to the board
and participate in governance. However the
Centre’s and the sponsor banks’ equity can-
not go below 51 per cent of the total equity,
thus retaining the public sector character of
the RRBs. The enhanced equity will enable
RRBs to do inclusive banking by takingmore
customers and expanding credit to different
types of livelihoods and enterprises.
Labour laws
The Factories (Amendment) Bill 2014 is
pending before the Lok Sabha after which it
will go to the Rajya Sabha. The Bill seeks to
remove the restrictive provisions that pre-
vent women frombeing employed in certain
types of industries and also working in night
shift (Box 2.5). The Bill stipulates safety
and health restrictions for employment of
pregnant women, persons with disabilities
in certain industries and so on. The Bill
intends to improve the working conditions,
promote health and safety in the factories
and impose additional responsibilities on
Food security and public distribution: In order
to avoid high leakages in the distribution sys-
tem, the implementation of the National Food
Security Act (NFSA) should be limited to states
that have done end-to-end computerisation of
their foodmanagement system. The Committee
also recommended that the coverage of the
NFSA be reduced from the current 67 per cent
to 40 per cent of the population.
The allocation of food grains to priority house-
holds should be increased from 5 kg per person
to 7kg per person. Pricing for high priority
families should be adjusted to be about 50
per cent of MSP.
Move to cash transfer: FCI should gradually
move from a food grain distribution system
to a cash transfer system. This can begin from
larger cities.
Cash subsidy for fertiliser of
`
7000 per ha and
discontinue fertiliser subsidy in present form.
Source:
High Level Committee Report on the
Restructuring of FCI by Shanta Kumar, GoI,
2015.
Box 2.4:
Gist of recommendations of high level committee
