Comment: Economic reforms have an adverse effect on food security and health security’

Economic reforms have an adverse effect on food security and health security’. Comment.


Food security and health security have been adversely affected for the poor as a consequence of new economic reforms. The poor avail of less than one-third of the food grains provided by the Public Distribution System.
Food security is related to (i) employment security via rate of growth of the economy, (ii) government policies regarding prices of food grains and food subsidies, and (iii) general rate of inflation and more especially the prices of food grains. Since the period of economic reform has been characterised as the period of jobless growth or very slow growth of employment, this has produced an adverse effect on food security of the poor by a fall on employment. The continuous rise in the prices of food grains, more especially of consumer price index of agricultural labourers, remaining above the double-digit level, also adversely affected food security of the poor. Agricultural labourers suffered the impact of double squeeze – firstly, lower level of employment resulted in an erosion of their real earnings over the year;
Secondly, the continuous rise of Consumer Price Index for Agricultural Labourers (CPIAL) by over 10 per cent for the entire 5-year period (1990-91 to 1995-96) has reduced their real wages in two ways – a depreciation of the purchasing power of the Rupee and the failure of the wage to increase commensurate with the rise of CPIAL. There is no doubt that the food security of the poor has been adversely hit by the reform.

Employment Security and New Economic Reform
The new economic reforms have been emphasing new power projects both in the public and the private sectors. Besides causing environmental problems, these projects have been displacing people from their traditional livelihood systems. By encouraging multinationals to enter food-processing industries, the reform process by the sheer competition from these business giants has led to labour displacement. The entry of big business in agriculture has also led to displacement of labour displacement. The entry of big business in agriculture has also led to displacement of labour engaged in the marketing of agricultural produce. The case of fisherman is glaring and has resulted in massive protests from fishermen who were faced with a threat to unemployment as a consequence of competition from mechanized boats. Consequently, there is a good deal of evidence to corroborate the view that the process of economic reform has generated far greater backwash effects in terms of labour displacement, than in generating spread effects in terms of enlarging new employment opportunities. The net effect of these trends is the deterioration in the quality of employment opportunities. The net effect of these trends is the deterioration in the quality of employment and this is witnessed in the growing increase in the number of casual labourers – the most unprotected form of Indian labour. Casualisation of a labour is witnessed even in industry as a result of the growing phenomena of lockouts and closures. G. Parthasarthy reviewing the impact of structural adjustment on employment concludes: “Given this short period experience, what the medium-term has in store for the Indian poor is anybody’s guess. It is essentially dependent upon the rate and composition of growth and its effects on employment. With past experience as a guide, we may achieve a high growth rate, the benefits of which may flow to the affluent and middle class. The poor may not gain because jobs are not found to grow with incomes. This type of scenario could call for effective safety nets for unorganized sectors in the form of right to work at a minimum subsidized wage and guarantee against unemployment through unemployment insurance.” (Parthasarthy G, Social Security and Structural Adjustment, the Indian Journal of Labour Economics, Vol. 39, No. 1, Jan-March 1996).

Health Security
As a result of the process of economic reform, privatisation of health services is recommenced. But according to the 42nd round of NSS, the average payment for private hospitals in rural areas was Rs. 735.4 as against Rs. 304.3 for Government hospitals i.e. 2.3 times more than charged by Government hospitals. In urban areas, the situation was even worse. Private hospitals charged Rs. 1,206 as against Government hospitals charging Rs. 355. In other words, charges in private hospitals in urban areas were 3.13 times more than in Government hospitals. Privatisation is thus bound to affect adversely the maintenance cost of health services of the poor. This has been compounded by the fact that in view of the patent rights payments to be made to patent-holders, viz. multinational corporations, the cost of medicines has been rising under the new economic reforms.