SPECIAL ARTICLES

Government Operations in Foodgrains

Raj Krishna

The Government of India's foodgrain operations in the last 16 years have failed to achieve
everyone of their objectives. Growth of average consumption has not been stabilised; imports have
not been minimised; marketed surplus has not been socialised; and the poorer sections of the popu-
lation have not been provided their minimum requirements.
If the objectives of Government operations in foodgrains had been clearly defined and the
extent of the operations quantitatively determined, much progress would have been made by now
towards their realisation.
Per capita consumption, instead of being allowed to fluctuate widely from year to year with
fluctuations in output, could have been stabilised at a reasonable level.
Instead of talking endlessly of self-sufficiency and actually importing 64 million tonnes of
foodgrains over the period, a steadily growing consumption could have been sustained with half that
quantity of imports.
Instead of promising to nationalise the entire marketed surplus and in fact obtaining only
8 per cent of it, the Government could have gradually come to acquire a little more than half of it.
Instead of trying to introduce universal rationing on a widespread scale and keeping it always
on the brink of collapse, the Government could have deliberately decided to supply foodgrains to the
most deserving" one-quarter of the population through its distribution network.
Finally, instead of making frequent announcements of the intention to have a buffer stock
without ever having one, the Government could have built an adequate reserve with small addi-
tional imports earmarked for the purpose.
Unless there is a dramatic increase in the long run growth rate of foodgrains production, the
execution of a coherent government programme to achieve the four objectives of steady growth of
consumption, fair price distribution, socialisation of the marketed surplus and self-sufficiency will
be necessary — and possible. An average consumption of 15.8 ounces per capita can be sustained
and low income families assured of their needs w i t h strictly limited imports of not more than 7
million tonnes in the next four years.

AN ATTEMPT has been made in
this paper to evaluate the Govern-
ment's foodgrains operations dur-
ing the last 16 years. All the ope-
rations of the Government, includ-
ing imports, domestic purchases,
fair price sales, and maintenance
of stocks, are viewed together be-
cause the quantities involved and
the policy decisions about them are
necessarily interlinked.
A formulation of the objectives
of Government operations is given
in the following section. The be-
haviour of the quantities involved
in Government operations during
he last 16 years is examined in the
hirdsection in order to assess the
Progress made in realising these
objectives. The next section pre-
sents some hypothetical, normative
models of how these variables
should have behaved if the policy
determining them had conformed to
the stated assumptions of each
model. In view of the inter-rela-
tionships between different quanti-
ties, and the fact that, within wide
limits, it was possible for the Gov-
ernment to import, purchase, sell
and stock more or less than it ac-
tually did, the construction of alter-
native normative models and their
comparison with actual operations
turns out to be the best way of eva-
luating Government policy. The dis-
tribution problem is discussed in
the fifth section. In the sixth sec-
tion, it is argued that perfect fore-
sight was not necessary for con-
ducting Government operations ac-
cording to the alternative models.
The crucial variables could either
be determined by policy decisions or
predicted with reasonable parameter
values; and the stock policy could
have been designed to absorb the
shock of deviations between their
expected and actual values. The
study of "might-have-beens'4, em-
bodied in alternative models, also
yields valuable insights about how
present and future policy might be
improved. The seventh section, there-
fore, presents some projections for
the next few years. The last section
summarises the findings.
II
Objectives
Any evaluation of the Govern-
ment's operations in foodgrains
should begin with a clear formu-
lation of the objectives of these ope-
rations. Many statements of these
objectives are available in the re-
ports of the numerous foodgrains
policy committees appointed in the

1695
September 16, 1967
last 24 years. For the present ana-
lysis, however, we shall use the
following synthetic list.
(i) Steady growth of consump-
tion: There should be steady
growth in the per capita supply of
foodgrains in the country. And fluc-
tuations in supply from year to year
should be reduced.
(ii) Fair price distribution: The
sales of the Government should pro-
vide an assured minimum supply at
a "fair" price to an increasing pro-
portion of the low-income families
of the country.
(iii) Socialisation of the Surplus:
An increasing proportion of the mar-
keted surplus should be purchased
and sold by the Government (so-
cialised) in order to realise objec-
tive (ii).
(iv) Self-sufficiency: As the sole
importer of foodgrains the Govern-
ment should use imports as well
m
ECONOMIC AND POLITICAL WEEKLY
as domestic purchases to realise ob-
jectives (i) and (ii). But, subject
to the realisation of these objec-
tives. imports should be minimised
and eventually eliminated.
This particular list of objectives is
by no means exhaustive. And per-
haps it by-passes many controver-
sial issues. But it does include the
hard core of what, by wide agree-
ment, the Government should be
trying to achieve by its operations.
And it is so designed that a quan-
titative indicator of the achieve-
ment of each objective is available.
Thus the rate of growth of per
capita supply can indicate how fast
it is growing; and its annual varia-
tion can indicate how stable it is.
The ratio of Government sales to
estimated total demand or low-
income demand can indicate the ex-
tent to which this demand is being
met by the Government. The ratio
of Government purchases to output
or to the estimated marketed sur-
plus can indicate the progress of
socialisation of the surplus. And
the ratio of imports and of domes-
tic purchases to Government sales
can indicate the progress towards
self-sufficiency.
Ill
Trends
Time series of these indicators
are tabulated in Tables 1, 2 and 4.
Alt quantities relate to the combin-
ed operations of the Central and
State Governments in all food-
grains."
An examination of the supply data
in Table 1 shows that there has
been a statistically significant linear
trend in per capita availability. But
the availability has fluctuated wide-
ly around the mean (15.4 ozs per
day) from year to year. It was
6 to 13 per cent below the mean in
1951, 1952, 1953 and 1958; and 5 to 7
per cent above the mean in 1959,
1961, 1962 and 1965. Variations from
year to year have also been substan-
tial. The supply could increase as
much as 11 or 14 per cent and fall
as much as 7 to 8 per cent in a
single year.
Thus neither the import policy nor
the stock policy of the Government
seems to have stabilised consump-
tion.
In Table 4 we note that Govern-
ment sales have met only 8 to 9
per cent of the demand for food-
grains during the First and Third
Plan periods. In the Second Plan
period they catered to an even smal-
ler proportion (6 per cent) of de-
mand. Thus the objective of pro-
viding price-relief to low-income
groups has been realised only to an
insignificant extent. Even a conser-
vative estimate of low-income de-
mand cannot be less than 20 per cent
of the total. But Government ope-
rations have not met even half of
this demand in the three Plan per-
iods. I t is only in 1966 that, due
to the drought, Government sales
increased, for the first time, to 17
per cent of the total demand.
* The author is grateful to S K
Upadhyaya and Rupendra Nath
for computational help.
ECONOMIC AND POLITICAL WEEKLY September 16, 1967

Another important indicator of po-

licy is the ratio of Government pur-
chases to domestic output. We see
from Table 4 that this proportion
declined from 3.6 per cent in the
First Plan to 1.1 per cent in the
Second Plan and recovered only to
1.8 per cent in the Third Plan.
Thus the Government has not even
been purchasing a constant propor-
tion of domestic output. Ideally, it
should have been purchasing a ris-
ing proportion of output, to provide
relief to an increasing number of
low-income families.

Assuming that the marketed sur-

plus ratio has been 30 per cent
throughout the period (though,
strictly speaking, the ratio is not
constant) the behaviour of the pur-
chase/output ratio implies that not
more than 12 per cent of the mar-
keted surplus was acquired by the
Government in the First Plan and
only about 3½ to 6 per cent has
been acquired in the last two Plans.
These figures hardly indicate pro-
gress towards socialisation of the
grain surplus which has been de-
clared to be the intention of the
Government for a long time.
Finally, we observe in Table 3 Second Plan the annual purchases respondingly, domestic purchases
that average annual imports were were reduced to about a third, and contributed about one-half of Gov-
nearly doubled between the First in the Third Plan to about two- ernment sales in the First Plan but
and the Third Plans, from 2.5 mil- thirds of this quantity. As a result, in the last two Plans they contri-
lion tonnes to 4.9 million tonnes; the Government's grain distribution buted only about a fifth of sales.
but the effort to purchase local programme came to depend more
grain was relaxed in successive and more on imports. In the First These facts leave no doubt that
Plans, in spite of the relentless Plan, about half of Government the availability of imports was used
growth of total demand. The Go- sales were derived from imports, by the Government to relax its do-
vernment purchased about 2.2 mil- but in the Second and the Third mestic purchase operations. There
lion tonnes of grain every year in Plans, imports provided 75 to 90 is no evidence of any serious at-
the First Plan period, but in the per cent of Government sales. Cor- tempt on the part of the Govern-

1697
September 16, 1967 ECONOMIC AND POLITICAL WEEKLY
ECONOMIC AND POLITICAL WEEKLY
Derived from Table 2.
ment to reduce the extreme depend-
ence of its operations on imports.
However, while imports loom
large in the operations of the Gov-
ernment they provided only 4.5 to
6.5 per cent of the aggregate de-
mand lor grain in India in the three
Plan periods. (Last year, of course,
the ratio rose to 12 per cent.) This
fact should be noted specially by
those foreign observers of the Indian
food situation who write as if India
is being fed almost entirely from
imported supplies.
September 16, 1967
IV
Alternative Models
The inter-relationship between
different operations of the Govern-
ment is summarised in the simple
identity:
(1) Opening Stock + Purchases
+ Imports Sales + Closing Stock
or
(2) Purchases 4- Imports = Sales
+ Stock Increase.
The identity shows that, within
limits, any three of the four vari-
ables — Purchases, Imports, Sales
and Stock Increase — can be free
decision variables for the Govern-
ment. Therefore, in order to pro-
gramme an operation, the objectives
need to be translated into restric-
tions on the behaviour of these va-
riables.
We shall construct some feasible
alternative programmes on the as-
1699
September 16, 1967
sumption that the primary objec-
tive was to provide a given level of
per capita consumption. We can
consider three alternatives.
(i) The desired per capita avail-
ability may be determined by policy
makers and kept constant over time.
This means that total supply is al-
lowed to grow at a rate just equal
to the rate of population growth.
(ii) The total supply may provide
for the effect of population growth
as well as the growth of per capita
income on the demand for food-
grains.
(iii) The total supply may pro-
vide for the effect of population
growth and only a part of the effect
of growth in per capita income.
For any year, given the desired
per capita supply and the popula-
tion, the aggregate demand can be
estimated. Given the estimated de-
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ECONOMIC AND POLITICAL WEEKLY
mand and net output, the total defi-
cit/surplus can be estimated. We
can then specify that in deficit
years, in view of the objective of
self-sufficiency, imports are equal to
the deficit minus the opening stock,
and sales equal to the deficit itself;
and that, in surplus years, nothing
is imported, and the whole surplus
is purchased. Consequential changes
take place in the inventory.
Three hypothetical models, trac-
ing the time-path of all the vari-
ables determined according to this
logic, are shown in Tables 5, 6 and
7.
These models may be called "sta-
bility" models, because they are de-
signed to stabilise consumption with
minimum necessary imports. They
do not realise the distributional ob-
jective. Later, we shall add the re-
quired "distributive" sales and pur-
chases to the "stability" sales and
purchases given by one of these
models.
In all the models it is assumed
that the population and net output
are known. The first model pro-
vides a constant per capita avail-
ability of 14.2 ounces per capita per
day. This (constant) per capita
availability has been calculated on
the autarchic assumption that,
throughout the 16-year period, the
population should have been fed
from domestic output alone.
The second model provides for an
annual growth of 1.02 per cent in
per capita consumption. This would
be the growth required if the in-
come elasticity of demand for food-
grains is assumed to be 0.7 and per
capita income to be growing at the
actual rate of 1.46 per cent per an-
num.
The third model assumes a lower
ECONOMIC AND POLITICAL WEEKLY
income elasticity of demand, equal
to 0.5, and thus provides for the
growth of per capita consumption at
the rate of 0.73 per cent per year.
The base year consumption for
the second and third models is the
actual consumption in 1951, equal to
13.9 ounces per capita. And the open-
ing stock in all models is the actual
opening stock in 1951.
A comparison of the three models
with one another, and with the ac-
tual time series, provides important
insights about alternative policies
that were feasible in the last 16
years.
The actual imports during the 16-
year period amounted to 64.07 mil-
lion tonnes. By contrast, model 1
requires the import of only 17.22
million tonnes—all in the first three
years of the period. There were
large deficits in these years and the
initial stock was small. Model 3 re
quires the import of 32.3 million ton-
nes, or a little more than half of the
actual imports. The imports would
have been concentrated in the first
three years, and in 1958 and 1966.
Nearly half of the total imports
would have been required in 1966.
Model 2 would have required an im-
port of 53.5 million tonnes. More
than 60 per cent of this quantity
would have been needed in the last
four years.
Thus even if the full effect of per
capita income growth on consump-
tion had to be provided, imports
could have been about 11 million
tonnes less than the actual. With a
slower growth of per capita con-
sumption, they could have been re-
September 16, 1967
duced almost by half. And with a
fixed consumption of 14.23 ounces
per capita per day, they could have
been reduced to a little more than a
fourth of the actual imports. It
should be noted that the fixed con-
sumption model generates a closing
stock which is sufficient to return
the imports of the initial three years
and leave the same closing stock as
at the beginning of the period. There-
fore, over the whole period net im-
ports in this model would be zero.
It is simply not true that smaller
imports would have led to starva-
tion. In fact, a reasonable, steadily
growing per capita consumption
could have been provided through-
out the period with smaller imports,
if Government operations had been
rationally designed for this purpose.
1701
ECONOMIC AND POLITICAL WEEKLY
The Distribution Problem
The discussion in the previous
section has been oriented mainly to
the objective of stabilising consump-
tion with minimum imports.
We should now consider distribu-
tive operations designed to make
sure that the low-income population
does get the intended average per
capita consumption. This is the ra-
tionale of the fair price shop (FPS)
system. The need for this system
arises from the fact even when the
total supply permits a given aver-
age consumption, many sections of
the population cannot in fact attain
this consumption because their in-
come is low.
We shall assume that the FPS
system is meant to sell grain at a
fair (subsidised) price only to the
low-income families, and the rest of
the population is expected to pur-
chase its foodgrains requirements in
the open market price. The case
for such a two-market regime has
been argued elsewhere.1
The criteria, for determining the
number of people deserving price re-
lief, have never been clearly
laid down. For the present analysis
we have assumed that income-tax
paying families and cultivator fami-
lies should not be served by the FPS
system. The average number of fa-
mily members is assumed to be five.
Thus the number of persons not en-
titled to the FPS service is estimat-
ed as five times the number of in-
come-tax paying individuals and fa-
milies (5.7 millions) plus five times
the number of cultivating males
(332 millions) in 1961. Exclud-
ing these, there would have
been 102.16 million persons, out
of a total population of 439.23
September 16, 1967
millions, deserving price relief
in 1961. I n other words, the
FPS system should have served
about 23.25 per cent of the popula-
tion. We have assumed the propor-
tion to be 25 per cent. Table 8 shows
the total sales and purchases requir-
ed if 25 per cent of the population
was to be continuously supplied the
target per capita consumption of mo-
del 3 every year,
By subtracting the stability sales
from the total sales we get the re-
quired additional "distributive"
sales. And by adding the ''distribu-
tive" sales to the stability purchases
we get the total purchases that
should have been made.
We see from Table 8 that in order
to serve 25 per cent of the popula-
tion, the FPS system should have
been selling an average quantity of
about 16 million tonnes of grain
every year instead of 5.5 million ton-
nes. And the Government should
have purchased, on the average,
about 19 per cent of domestic out-
put. instead of only 2.4 per cent, or
63 per cent of the marketed surplus
instead of only 8 per cent.
Our model indicates that sociali-
sation of the entire surplus of
foodgrains was not necessary.
But it does suggest that the
Government should have acquir-
ed more than half of the sur-
plus every year. Of the total FPS
sales, only 12.5 per cent would then
have been derived from imports in-
stead of 72 per cent.
VI
Models w i t h Forecast Data
Let us now consider the question
whether the models discussed above
could have been made operative
without correct forecasts of the
variables involved.
The logic of the models shows
that the programme for any year
depends critically on the estimate
of the aggregate demand to be
provided for and the net output.
Now, aggregate demand could have
been a decision variable. Even if
in ' T h e Economic Times', Octo-
ber 27, 28 and 31, 1964.
1703
September 16, 1967
sufficient knowledge of the rate of
growth of demand to be provided
for was not available in 1951, it was
possible, at least by 1955, to make
reasonable assumptions about it.
The empirical knowledge avail-
able during the First Plan period
provided a basis for assum-
ing that population would grow by
about 2 per cent and per capita
income by 1.5 per cent per year and
that the income elasticity of demand
for foodgrains was at least 0.5.
Therefore, an annual growth of 2.75
per cent in demand was the mini-
mum that should have been provid-
ed for. The rate could have been
revised as more knowledge became
available.
As regards the output of food-
grains, we know now that the long-
run (1951-1965) rate of growth has
been 3 per cent. But in the First
Plan the average annual increase
was as high as 5 per cent, in the
Second Plan it was 3.65 per cent,
and in the Third Plan 3.10 per cent.
Therefore, no assumption about
some (constant) annual growth rate
1704
ECONOMIC AND POLITICAL WEEKLY
could be sustained. And any viable
programme of Government opera-
tions should have been so designed
that it could bear the shock of a
large decline of output below its
long-term trend. We observe
from the 15-year data that in
bad weather years, foodgrain
output can drop below its trend
value by 9 to 10 per cent or,
in absolute terms, by 5 to 6 million
tonnes. (The last two years are ex-
ceptional in that output remained
below the trend by 18 million ton-
nes.) We also observe that output
can remain below the trend for as
many as three successive years.
Shortfalls had occurred in the initial
years of the First Plan itself.
In view of these facts, the follow-
ing strategy could have been adopted
at least in the Second Plan period.
The Government could determine
the programme for any calendar
year on the basis of the estimate of
the demand to be provided for, and
the successive forecasts of output
which are available from January
onwards. By June or July, the Gov-
ernment can have knowledge of the
crop with a narrower margin of er-
ror, and adjust the programme for
the remaining half of the calendar
year accordingly.
But, in addition, a reserve of about
6 million tonnes should have been
built over a three-year period by
special imports earmarked for the
purpose. This reserve could be utilis-
ed in any drought year to cover fore-
casting errors of time-lags between
planned imports and purchases and
actual availability.
VII
Some Projections
We cannot relive the past now
with a more rational Government
operation in foodgrains. But the an-
alysis of what the time-path of some
important magnitudes might have
been provides valuable guidance
about how operations might still be
conducted in the coming years. Scar-
city will still be with us; our low-
income people may still not be able
to obtain their minimum foodgrain
ECONOMIC AND POLITICAL WEEKLY September 16, 1967

Source: b u l l e t i n of Food Statistics', 1965, p 30; and 1966, p 31;

* Directorate of Economics and Statistics,
Imports in Col 4 are calculated as Col 5 minus (Col 2 + 3 ) . Imports so calculated differ slightly
from imports as given on p 92 of the 'Bulletin' (1965) except for 1956. Import figures on p 92 include
transit losses. Imports in Col 4 do not.
Col 8: Adjusted figures for 1951 to 1955 from 'Indian Economic Statistics', August 1964, p 28.
Other figures from 'Bulletin of Food Statistics', 1965, p 7; and 1966, p 8. Figures for 1963-64 and 1964-65
are partially revised. Figures for 1965-66 and 1966-67 are provisional. Figure for 1966-67 from Econo-
mic Survey', 1966-67.
Col 9: See Table 6, Col 2 and footnotes to Table 6.

requirements from the open market;
and, therefore, the need for a ration-
al management of the available food
supply is as urgent as ever.
No one can be very enthusiastic in
attempting to project critical magni-
tudes about India's foodgrains eco-
nomy in the next few years. For, we
suffer not only from the uncertain-
ties of the natural monsoon but also
the monsoon of Government behavi-
our and the monsoon of peasant be-
haviour. Nevertheless, at least some
near-term projections are indispens-
able. As Malinvaud has said: "Who-
ever has to decide for the future
must have some idea of the future".
In Table .9 two alternative sets of
figures about how Government oper-
ations may be conducted are present-
ed. The demand column is a continu-
ation of the demand columns of
models 2 and 3. The actual per capi-
ta consumption declined to 14,2 ozs in
1966. But in accordance with these
two models it is assumed that it
should recover to 16.7 ozs or 15.6 ozs
in 1968 and then grow at the rate
of 1.02 per cent or 0.73 per cent. Po-
pulation is supposed to grow now at
the rate of 2.46 per cent per annum.
And, in spite of the new agricultural
strategy, the long-run growth rate of
output in the next 4 years is assum-
ed to remain what it has been (3 per
cent). In particular years, of
course, production may rise much
above or turn steeply below the 3
per cent trend. (It is interesting to
note here that even the habitually
optimistic Perspective Planning Di-
vision of the Planning Commission
has projected the foodgrains output
at only 106.2 million tonnes in 1970-
71, although the target is 120 million
tonnes. This figure implies a growth
rate of only 3.1 per cent between
1964-65 and 1970-71. See Material
and Financial Balances', p 33,)
Considering the acute shortage of
1967, the opening stock in 1968 in
assumed to be only 1 million tonnes,
even though it has been above 2
million tonnes in recent years. (The
reserve stock of 6 million tonnes pro-
posed above must be additional to
the normal stock and created by
special imports.)
With these assumptions, our pro-
jections show that if consumption is
September 16, 1967
allowed to grow modestly, as In
Panel A of Table 9, total imports of
less than a million tonnes may be
necessary in the next 4 years; but
if consumption is allowed to grow
at the higher rate, imports will add
up to 34 million tonnes or about 8.5
million tonnes a year. The policy im-
plication is evident: apart from try-
ing to maximise production, the Gov-
ernment must regulate average per
capita consumption as a decision va-
riable, and determine imports ac-
cordingly. Otherwise our abject de-
pendence on imports will continue.
We noted above in Section I I I that
the FPS system catered to 17 per
cent of aggregate demand in 1966.
The distributional requirements in
column 10 of Table 9 have been
worked out on the assumption that
the ratio w i l l remain 17 per cent in
1967 and increase by 2 percentage
points every year to the required
25 per cent i n 1971. The Govern-
ment w i l l then have to sell 16 to 23
million tonnes a year and purchase
16 to 21 per cent of output if the
lower consumption level of Panel A
is provided. And it will have to sell
17 to 26 million tonnes a year and
purchase 12 to 14 per cent of output
if the higher consumption of Panel B
is to be provided. The purchase ratio
is lower in the latter case because
the dependence on imports w i l l be
greater.
I n any case, the Government ma-
chinery must remain geared to sell
about 20 million tonnes of grain
every year as compared with 14 mil-
lion tonnes in 1966, and to purchase
more than half of the marketed
surplus, as compared w i t h only a
sixth in 1966, if the basic objectives
of Government operations are to be
realised even now. The prospect
seems to be that the required level
of sales and imports may be attain-
ed, but the stepping up of purchases
to the required level may not be
possible for it requires a revolution-
ary change in purchase policy and
administration.
If, for financial, administrative, or
political reasons, the required in-
crease in purchases is not achieved,
then gross inequalities in the distri-
bution of the available supply will
persist. The only development that
can change this bleak outlook radi-
cally is the emergence of a long-run
1706
ECONOMIC AND POLITICAL WEEKLY
production growth rate which is
higher than 3 per cent.
Summary and Conclusions
Our brief survey of State trading
in foodgrains in the last 16 years
shows that the judgment of econo-
mic history on its achievement is
likely to be very unfavourable. Per-
formance has been poorer than pro-
mise in every respect. The growth of
average consumption has not been
stabilised. Imports have not been
minimised. The marketed surplus
has not been socialised. And the
'daridra-narayana' has not been
identified and regularly provided
his minimum supplies.
Slogans have been repeated ad
nauseam: National Self-sufficiency,
Monopoly Procurement, Nationalisa-
tion of the Grain Trade, Price Stabili-
sation, Butler Stocks, National Food
Budget, etc, etc. But the actual de-
termination of the important magni-
tudes involved in Government oper-
ations has been utterly erratic and
unprincipled — the outcome of a
clumsy administrative-cum-political
handling of one exigency after an-
other. The world of slogans and the
world of real behaviour have flou-
rished in splendid isolation from
each other.
Our analysis shows that if objec-
tives had been defined clearly and
consistently, and Government opera-
tions had been quantitatively deter-
mined by them, considerable pro-
gress would have been made by now
towards their realisation. Instead of
allowing per capita consumption to
fluctuate widely from year to year
with fluctuations of output, the Gov-
ernment could have stabilised it at a
reasonable level and let it grow
steadily. Instead of talking endlessly
of self-sufficiency and actually im-
porting 64 million tonnes of grain,
the Government could have main-
tained a steadily growing consump-
tion with half of the quantity. In-
stead of promising to nationalise the
entire marketed surplus and obtain-
ing only 8 per cent of it, the Govern-
ment could have gradually come to
acquire a little more than half of it.
Instead of trying to introduce uni-
versal rationing on a widespread
scale and keeping it always on the
brink of collapse, the Government
could have consciously chosen to
serve only the most deserving quart-
er of the population through its FPS
system. Thus a legal, rational, two-
market, two-price system would
have existed instead of the illegal
two-market, two-price regime, which
overambitious rationing and price
control have brought into being.
Finally, instead of making fre-
quent announcements of the inten-
tion to have a buffer stock without
ever having any, the Government
could have built an adequate reserve
with small additional imports ear-
marked for the purpose.
Projections show that, unless there
is a dramatic increase in the long-
run rate of growth of grain pro-
duction, the execution of a coherent
Government programme in accord-
ance with the four objectives (steady
growth of consumption, fair price
distribution, socialisation of the sur-
plus, and self-sufficiency) w i l l still
be necessary — and possible. An
average consumption of 15.8 ozs can
be maintained and low-income fami-
lies can be assured of their needs
with strictly limited imports (in-
cluding a reserve) of not more than
7 million tonnes in the next 4 years,
if half of the marketed surplus is
socialised. The alternative is the
continuation of heavy imports. If
we must import large quantities of
grain, it is better to pay for it in
foreign exchange at the expense of
other imports, than to allow grain-
supplying governments to erode the
sovereignty of India