Unpaid bills of Rs 17,000 crore — and growing — have revealed hidden food subsidies and acute financial mismanagement as the Indian government prepares to adopt the costliest, most ambitious legislation of its tenure. Documents reveal this is the money the government now owes the state-run Food Corporation of India (FCI), hampering its mammoth operation of buying grain from the farmer, storing it and selling it cheaply to millions of poor people. The documents also reveal that the food subsidy for 2009-10 was about Rs 70,000 crore, or Rs 10,000 crore more than the government officially stated. “The government is not reflecting its true food subsidy,” said a highly placed official, requesting anonymity because of the issue’s political sensitivity.
The unpaid, hidden subsidies indicate the financial and governance challenges ahead for the Food Security Act, which will likely balloon food subsidies to more than Rs 1 lakh crore. The new law, likely to be introduced in the monsoon session of Parliament, comes with a promise of cheap food to the world’s largest malnourished population and possible peril to India’s finances and food grain costs. “We do have a problem, some amounts are pending,” minister of state for food and public distribution KV Thomas acknowledged. “I am myself taking up the issue with various government departments that have not made payments on time.”
So tardy were those payments that food subsidy defaults grew 800% over the last six years, according to a March 2011 bulletin issued by the food ministry. From Rs 6,800 crore for the last fiscal, these arrears have today exceed Rs 17,000 crore. The non-payment of subsidies recently left the FCI with less than 10 days of credit, and the State Bank of India, which leads a consortium of 59 banks funding the nationwide movement of food, refused further credit, sources in the finance and food ministries said, on condition of anonymity.
In Mumbai, an SBI official, similarly refusing to be identified, confirmed that FCI chairman Siraj Husain and his team visited Mumbai about two months ago, seeking a short-term loan from the consortium, beyond the corporation’s government-secured credit limit of Rs 35,000 crore. “We had a pleasant chat,” said the official, explaining that the loan request was turned down since it would not be backed by a sovereign guarantee. The FCI eventually cobbled together “some money” from individual banks, he said.
With a World Bank warning last week that 60% of India’s burgeoning food subsidies do not reach the poor, the mismanagement of payments is the latest evidence of a faltering public-distribution system (PDS) that experts said needs to be fixed before the new law is introduced. “Given the current state of the PDS, without a massive and effective reform, it would be irresponsible to push more money into the system,” said Abhijit Banerjee, an economist at the Massachusetts Institute of Technology (MIT) and founder-director of the Abdul Latif Jameel Poverty Action Lab.
Drafted by the National Advisory Council and strongly backed by UPA chairperson Sonia Gandhi, the Food Security Act will make access to food a legally enforceable constitutional right, like the right to life. The NAC has proposed that in the first phase 72% of the population get subsidised food by 2011-12, with wheat at Rs 2 per kg and rice at Rs 3 per kg. The government has not yet decided prices.
Pakistani Anti-graft body wants travel ban on Nawaz Sharif, kin
Pakistan’s anti-corruption watchdog has asked authorities to place ousted premier Nawaz Sharif, his daughter and son-in-law on the Exit Control List to prevent them from leaving the country.
The National Accountability Bureau (NAB) sent a formal request to the ministry of interior. The interior ministry officials confirmed that the NAB wrote that names of Sharif, his daughter Maryam Nawaz and son-in-law Capt (retd) Muhammad Safdar should be put on the Exit Control List (ECL), which listed individuals not allowed to leave Pakistan.
The NAB argued that as the trial of the three nears its conclusion, it is feared that they would leave the country.
Earlier, a similar request to place name of finance minister Ishaq Dar on ECL was not accepted, allowing him to go to London and never return.
Sharif, 68, and his family this week filed an application with the accountability court seeking a fortnight’s exemption from personal appearance from February 19 onwards to let them go to London to see Sharif’s ailing wife. Three cases were filed against Sharif and his family last year, including Avenfield properties, Azizia & Hill Metal Establishment, and Flagship Investments.
Maryam and Safdar are accused only in Avenfield properties case. The NAB had filed two supplementary references against Sharif, his sons Hasan and Hussain regarding Al-Azizia Steel Mills & Hill Metal Establishment and Flagship Investment cases.
Pakistan “breaches obligations’ on nuclear arms reduction, UN court told
The Hague: Pakistan is violating its “obligations” to the international community by failing to reduce its nuclear arsenal, the Marshall Islands told the UN’s highest court on Tuesday.
The small Pacific Island nation is this week launching three unusual cases against India, Pakistan and Britain before the International Court of Justice.
Majuro wants to put a new spotlight on the global nuclear threat, its lawyers said yesterday, by using its own experience with massive US-led nuclear tests in the 1940s and 1950s.
“Pakistan is in breach of its obligations owed to the international community as a whole,” when it comes to reducing its nuclear stockpile, said Nicholas Grief, one of the island nation’s lawyers.
DeBrum warned that even a “limited nuclear war” involving the two countries would “threaten the existence” of his island nation people.
Pakistan and India have fought three wars since independence from Britain in 1947, two of them over the disputed Himalayan territory of Kashmir.
In 1998, the rival neighbours both demonstrated nuclear weapons capability.
The ICJ’s judges are holding hearings for the next week and a half to decide whether it is competent to hear the lawsuits brought against India and Pakistan — neither of which have signed the 1968 nuclear Non-Proliferation Treaty (NPT).
A third hearing against Britain — which has signed the NPT — scheduled to start on Wednesday will be devoted to “preliminary objections” raised by London.
The Marshalls initially sought to bring a case against nine countries it said possessed nuclear arms: Britain, China, France, India, Israel, North Korea, Pakistan, Russia and the United States.
Israel has never admitted to having nuclear weapons.
But the Hague-based ICJ, set up in 1945 to rule in disputes between states, has only admitted three cases against Britain, India and Pakistan, because they have accepted the ICJ’s compulsory jurisdiction.
Pakistan’s lawyers did not attend Tuesday’s hearings.
It did however file a counter-claim against Majuro’s allegations saying “the court has no jurisdiction to deal with the application” and insisting that the case is “not admissible”, said ICJ President Ronny Abraham.
Bangladesh to drop Islam as official religion following attacks on Hindus
New Delhi: Bangladesh is likely to drop Islam as its official religion following a series of attacks on people from other faiths in the country. The country’s Supreme Court is hearing a plea challenging the status of the official religion of the country to Islam.
Bangladesh, which was declared a secular country after its formation in 1971, was declared an Islamic country following a constitutional amendment in 1988.
According to a report in the Daily Mail, the plea has challenged the declaration of Islam as the national religion of the country.
The move is being supported by leaders from the minority communities like Hindus, Christians and Muslim minority Shiites.
Bangladesh has 90 per cent of Muslims, 8 per cent Hindus and remaining constitutes Christians and Muslim minority Shiites.
In last month, a Hindu priest was hacked to death following an attack on a temple in Panchgarh district. Two others were seriously injured in the attack. There have been several lethal attacks on writers and bloggers.
According to a report in the Independent, Islamist groups Jumatul Mujahedeen Bangladesh and Ansarullah Bangla Team are believed to have carried out at least seven attacks on foreign and minority people in Bangladesh in the past year.