Food Security Bill - Socially appealing, economically unpalatable:: Edelweiss

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The Union Cabinet has approved the National Food Security Bill (bill), 2011 which provides legal entitlement to food grains at a cheaper price to ~63% of the country’s population. The bill, to be passed by parliament to become law, seeks to cover a much larger proportion of population, leading to a positive social impact. However, besides increasing the burden on the fisc, the bill can potentially lead to higher inflation and pilferages. In sum, the introduction of this bill at the time when economy is facing headwinds from all corners would further worsen already weak sentiments as the negative impact outweighs positives from the social angle.