The latest threat to India's food security: Demonetisation

Customers buy vegetables from a stall at a market in Ahmedabad

Away from the India where Mother Dairies and Kendriya Bhandars feed a few – mostly employees of the Central government – much of rural India is stretched thin for access to food. As the government undertakes a series of knee-jerk policy measures to counter the adverse impacts of demonetisation, it is overlooking the severe threat that the food security of India's poor is facing from these policies. 

Poverty figures are a difficult admission of India's reality. Officially, around 22 per cent of India's population was below the poverty line in 2012, while several indicators on nutrition suggest far more Indians are nutritionally vulnerable. Any policy – howsoever 'noble' in intent – that disrupts their access to food have can have a disastrous impact on their food security status.

Nutritional security

Food security and nutritional status are deeply connected, it is pertinent to review some nutrition indicators. The National Family Health Survey (NFHS III) showed 43 per cent of India's children were malnourished – 55 districts in the country had more than 50 per cent of India's malnourished children under the age of five. A new NFHS survey – currently delivering results – shows a marginally better but pessimistic picture. The slowly changing figures over the decades show that India's malnourished children are growing up to become nutritionally challenged adults.

Other indicators corroborate this. More than 55 per cent of Indian women are anaemic (anaemia indicators are among the few available for studying the nutritional status of adults). India's stunting figures (low height for age) are alarming with 48 per cent of Indian children qualifying as stunted. However, the data that correlates to the poverty figures of the government is on 'wasting' – the gravest of nutrition indicators – which means low weight for height. One-fifth of India's children are wasted. This segment of the population faces the greatest risk and is not as wired to the mainstream as Prime Minister Narendra Modi's optimism indicates. 

Banking figures

As the demonetisation of the higher denomination notes enters its next phase – with the exchange of old bank notes no longer permitted and banks becoming the only place for depositing and withdrawing money – a look at banking figures for India suggests that Indian people don't bank all that much.

Census data show the poorest penetration of the banking sector in Manipur (29.6% of households), Meghalaya (37.5%) in the northeast, followed by Bihar and Assam at 44% each, with Odisha (45%) Madhya Pradesh (46.6%) and West Bengal following closely. Rural banking figures are lower. While more than 25 crore new accounts have been opened under the prime minister’s Jan Dhan Yojana scheme according to official records, it is unclear if these belong to households that did not have bank accounts prior to opening these under the scheme. The accounts were opened on the basis of identity cards or endorsement by gazetted officers, both of which are usually not available to a large portion of India's poorest people. It is difficult to understand how they are expected to sign cheques and swipe cards when they had difficulty counting their paltry earnings until yesterday.

In the government's war against black money, the first casualties are the poor. A conservative estimate by the Engineering Export Promotion Council (EEPC) estimates current job losses at 4 lakh daily-wagers, who in the cashless, dying markets have no work.

This is the picture of the textile and garment sector, which employs 32 million people. A quarter of the 2.5 lakh workers in the leather industry are reported to have lost their jobs already, while around 20 per cent of the workers in the jewellery industry have been adversely affected. The job losses are likely to hit the construction industry too – already witnessing a slowdown – which employs more than 45 million people, mostly as informal workers. More than 90 per cent of India's workers are employed in the unorganised sector. On their shoulders they carry India's economic growth while they themselves earn modest incomes.

In this context, the demonetisation exercise is not merely an 'inconvenience' to those on the edge. It is a matter of life and death. Erratic climate conditions and job market and related food insecurity led to the passing of National Food Security Act which committed to providing food security for Indians, particularly the poor and marginalised, through the public distribution system (PDS). Although ridden with inadequacies, the PDS does manage to reach many economically deprived families. Studies have shown that PDS lists have around 60 per cent error of exclusion and 25 per cent error of wrong inclusion, while 'leakage' of subsidised grain into the open market is a common practice which makes the PDS undependable for preventing food insecurity. However, this is the only system that you have in rural India. In not extending the old currency exceptions to the PDS, the government has revealed its urban focus and its distance from India's reality.

While news trickles in from across the country about people devising systems of their own such as going back to a pre-currency barter system and using the currencies of other countries, these self-devised survival measures may exclude the most vulnerable. Deaths caused by hunger and under-nutrition are hard to notice as they are disguised as common illnesses. It is unlikely that the cries of those who go over the edge will be heard in the background noise of Indian rulers' chest-thumping.