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Blueprint to end hunger

The right to food is the right of every person. Every individual must have regular access to sufficient, nutritionally adequate and culturally acceptable food for an active and healthy life.

Today, this is a major developmental challenge in India. We cannot feel proud of our achievements in different areas until this basic need of each individual is met. About 21 per cent of the population was undernourished in 1997. In 1999, over 53 per cent of the children under four were found to be malnourished. More than 85 per cent of pregnant women are anaemic.

Young children and pregnant women are particularly vulnerable to malnutrition. This is in the light of the fact that about 26.1 per cent of the Indian population lives below the poverty line (NSSO Survey, 1999-2000). Although malnutrition for India has fallen from 11.1 per cent in 1991-92 to a remarkable 6.4 per cent in 2000-02, this is due to the increased consumption of milk, animal protein, fruits and vegetables. An estimate of the National Sample Survey Organization shows that per capita consumption of foodgrains (cereals) has declined from 192 to 152 kilograms from 1977 to 1999 in the rural areas and from 147 to 125 kilograms in the urban areas.

According to recommendations of National Institute of Nutrition, to achieve a minimum energy requirement of 2738 k calories/ day/ head, a balanced diet containing of at least 460 grams of cereals apart from pulses, vegetables, fruits and milk should be consumed.
Accordingly, the per capita requirement of cereals will be around 165.6 kg per head per annum. But the average annual cereal consumption is hovering around 138.75 kg per head, moderately lower than the recommendations. As per the ICMR recommendations, the per capita consumption of fruits should be 120 gm per person per day as against 85 gm consumption today.

This is the scenario of the nutritional standards of our population which is a cause for concern for all of us. This concern is compounded when we here about the starvation deaths in some parts of the country. No doubt, the Central government is making concerted efforts to boost the growth rate in agriculture so that the production of foodgrains, vegetables, fruits, dairy products, poultry, fisheries and other agri-products is increased to meet the demands of the surging population and to maintain a sufficient buffer food stock. Still efforts are needed to sustain the growth so that we can withstand the vagaries of inclement weather on which Indian agriculture is heavily dependent.
Until farming is made viable it will be virtually impossible to reduce rural poverty and distress.

Agricultural production has stagnated during the period from 1998-99 to 2006-07. Total foodgrains production in 2006-07 was marginally higher at 209.2 million tonnes compared to 208.6 million tonnes in 2005-06. The average annual growth in agriculture in the 10th Five-Year Plan was a mere 2.3 per cent against the target of 4 per cent. As more than 60 per cent of our population is directly dependent on agriculture for its livelihood and survival, the occupation of agriculture has to be made productive and profitable.

Our farmers are increasingly going in to debt-trap due to crop failures as a result of less rain, disease and pest incidence and other technological constraints. The Planning Commission has decided to give more stress to the agricultural sector in the next Five-Year Plan starting next year to double the growth rate of the farm sector. According to the Deputy Chairman of the Planning Commission, serious efforts are on to revamp the basic agricultural policies based on the recommendations of Prof M.S. Swarninathan and the Mashelekar Committee to bring the agriculture sector to the centre-stage.

The commission is bringing a new policy framework by the year-end. The Central Government is trying to raise investment in land development, recharging of ground water, seed replacement and agriculture research to raise the income levels of farmers.
In a new deal to the agricultural sector, Prime Minister Manmohan Singh announced at the 53rd meeting of the National Development Council on May 28, 2007, and corroborated the resolve from the ramparts of the Red Fort on August 15, 2007, that there was a Rs. 25,000-crore plan to boost the farm sector growth by addressing the needs at the grassroots level during the next four years.

An end to hunger can be achieved by taking different steps by integrating the various ongoing programmes on nutrition and employment and by initiating some new programmes. An exhaustive and periodic survey should be conducted to identify the areas which are prone to less availability and scarcity of food. Areas which are drought prone, tribal and poverty-stricken areas should be brought under greater focus so that contingency and long-term plans can be formulated for such areas.

There is need to facilitate the setting up of local-level community food banks, comprising locally grown grains and legumes so that the availability of food articles is ensured in the hour of need. In such food banks, food articles should be loaned as per the need and should be realized after the surplus harvest.

We must have food buffer stocks at Gram Panchayat and Gram Sabha levels so that the supply to the needy could be ensured at the right time. Such food buffers should be used for the beneficiaries in the form of part of their wages in different rural employment programmes, including the National Rural Employment Guarantee Scheme. It is time to promote the cultivation and consumption of fruits and vegetables as well as dairy farming. The preservation of fruits, vegetables and other surplus food should be encouraged up to the village level for local consumption to maintain the nutritional security at a sustainable basis.

There is need for strengthening the public distribution system to ensure the availability of essential commodities. The basket of the public distribution system should be enlarged to accommodate more items so that it meets all the nutritional requirements of the public.
The mid-day meal scheme being implemented in some states should be implemented in every part of the country, in government and even in private schools, to cover the children most likely to be affected by the availability of food and malnutrition.
Nutritional security schemes of the government should focus more on the pregnant women, adolescent girls and infants. Promote the setting up of fodder and feed banks since livestock and livelihood are intimately related in most parts of the country and also directly related to the nutritional security of the people in the form of different dairy products.

Agriculture and agro-based industry has vast potential for the creation of jobs and this should be strengthened to provide opportunities for the people to earn their daily bread.
The concept of self-help groups should be strengthened and universalized because it will not only create work for the needy but also increase the income level of the participants, thus enhancing their purchasing power.

The concerted efforts of the Central and state governments will certainly give boost to the agricultural growth in the country and hopefully the fruits of this success will bring out millions of people out of the clutches of hunger and malnutrition.

Before the stock market boom and until unit linked insurance policies (ULIPS) came on the scene, money-back policies were preferred by buyers who planned for the various milestones in their lives. Money-back paid out a regular and periodical survival benefit during the policy term. For most buyers, it covered the basic need of a regular income-quite handy if you have goals such as buying a house or for your children’s requirements. But now, the money-back plans seem to be losing out to ULIPs.

Should a money-back policy find a place in your insurance needs? Money-back allows you partial withdrawals at pre-specified times during the term policy. The difference between a money back policy and an endowment policy is that the latter allows you to take a cumulative sum after maturity upon survival, while a money-back plan allows regular withdrawals of a pre-determined sum. But there’s an inherent advantage: in case of the worst, there is no reduction in the sum assured even if there were several benefits paid earlier.

Money-back policies come with different payout plans. But generally, in most money back plans, payouts are done every five years and are calculated as a percentage of the sum assured. So, a typical money-back 20-year term will make payouts at the end of the 5^th, 10^th, 15^th year respectively. Payouts are generally about 20% of the sum assured, but they vary between plans.

The key aspect of the money back policy is the steady rate of return and preservation of capital. The prime focus of LIC is insurance and capital protection. Therefore, investments are made prudently, in line with government norms, involving almost zero-risk. Hence, in a traditional money back product, where the insurer bears the risk, returns range anywhere between 7 and 10 percent.

Some other money back plans offer double or triple life cover or an increasing cover option that corresponds with the increase in term of the plan. If you are keen on a money back plan, you could explore the premiums for a simple money back (no frills) and take a term assurance rider at the outset with this, for an increased cover- instead of going for the double and triple cover option.

But with the focus on returns these days, money-backs seem to be losing to ULIPs. The returns from money-back policies are lower than those of ULIPs in a booming market. In general, money-back policies have returned between 5 and 7 percent after considering the periodic payouts also known as survival benefits. As the money-back policy invests in safer government debt, the yields are lower and, after deducting the insurance cost, the final return to the investor gets reduced.

But it is worth doing the homework on comparative returns of different money-back policies of insurers with the help of your financial planner.

Some money-back policies come with a few frills that make them a little attractive. For instance, the Kotak Life Insurance Money-Back policy says that if the policy holder is not able to pay premium in any one year, the policy will not lapse automatically if the accumulation has enough to take care of the mortality charges.

The Pros and Cons

Premiums on a money-back policy are higher than, say, a pure term plan. Rough back-of-the-envelope calculations show that premiums are higher by about 25 times than those of a term plan. That is because a part of the premium goes into investments such as securities of the government of
India.

On the other hand, the sum assured in a ULIP is generally five times the premium paid, with minor differences. For an annual premium of Rs 10,000, you get a cover of around Rs 50,000. However, the premium depends on age with some ULIPs offering a greater life cover.

Investment returns from ULIPS range anywhere between 15 and 25 per cent over the long-term (which is a minimum of 10 years) depending on the market conditions and the underlying portfolio that you choose. Generally, a 15 per cent return can be considered the norm-the Sensex returned a compounded return of 18 per cent in the last 17 years. However, remember that ULIPs come with market risk-stocks are riskier assets.

On the other hand, a money back policy invests largely in debt securities of governments and high rated securities. Hence, over the tenure, the inherent portfolio structure is generally safe. In a ULIP, again, one can withdraw funds whenever a need arises, provided your accumulations are more than the mortality charges or insurance charges, a money-back policy allows withdrawals only after five years. A ULIP investment requires you to constantly monitor the funds you can make timely switches according to market conditions. Investors can switch from a conservative to an aggressive portfolio, and vice versa.

If you are a conservative investor, and need insurance cover, the money-back policy could be a good alternative as bonuses are an added advantage. LIC is known to pay decent bonuses and at the same time has safety of the investment in mind. However, money-back policies are rigid- surrendering is an expensive affair, and the returns are fixed. If you are looking for a short-term investment (around five years), a money-back is better. But if you are looking for the long-haul investment, a ULIP tends to score as the risk of equity investments diminishes over time. Hence, determine your risk appetite and your investment horizon before choosing a money-back plan.