Improved grain storage alone not enough: Basu

The government's chief economic advisor, Kaushik Basu, has said that improved storage alone will not bring down food prices, and has called for a redesign of the mechanics of acquiring and releasing food to poor.

In a paper on foodgrain management, which is on the finance ministry website, Basu has argued that a set of rules are needed for automatic release of foodgrains to the poor, reports CNBC TV18.

The 40-page working paper by Basu makes three essential arguments as it seeks to generate a debate on policy options before the government. The first argument is that improved storage will not lead to lower prices, and therefore there are some steps that are needed to address this situation.

The chief among these is the fact that there are restrictions on the foodgrain that is supplied by the Food Ccorporation India to millers and then onwards to end users at the last mile.

The paper argues that those restrictions should be done away with to create more efficient distribution and allocation of resources in a foodgrain scarce society like India.

The second argument is about the redesign of the public distribution system, though the paper does not go into great length about it. It talks about the option of food coupons to begin with.