1. Govt food subsidy bill likely to hit Rs 1.4 lakh cr this fiscal

Govt food subsidy bill likely to hit Rs 1.4 lakh cr this fiscal

With all the 36 states and Union territories rolling out the National Food Security Act (NFSA), the government’s food subsidy budget for the current financial year is likely to increase to R1.4 lakh crore from the Budget allocation of R1.32 lakh crore.

By: | New Delhi | Updated: November 4, 2016 7:32 AM
At present around 80 crore people are covered under the food security legislation against a total intended coverage of 81.34 crore people. (PTI) At present around 80 crore people are covered under the food security legislation against a total intended coverage of 81.34 crore people. (PTI)

With all the 36 states and Union territories rolling out the National Food Security Act (NFSA), the government’s food subsidy budget for the current financial year is likely to increase to Rs 1.4 lakh crore from the Budget allocation of Rs 1.32 lakh crore.

According to food minister Ram Vilas Paswan, at present around 80 crore people are covered under the food security legislation against a total intended coverage of 81.34 crore people.

“When we came to power, the food law was being implemented partially in only 11 states. Although as per the act, the roll-out would have begun within one year of passage of NFSA in July 2013, many states took more time for preparing beneficiaries lists thus leading to delays,” Paswan said on Thursday. At the current coverage, he said that the monthly allocation of foodgrains to states/UTs under NFSA would be around 4.5 million tonne.

During the last one year, Kerala and Tamil Nadu had been seeking more time to implement the food security legislation, as these two states wanted to complete end-to-end computerisation of their Public Distribution System and the seeding of the Aadhaar numbers of the beneficiaries.

Recently, the food ministry also informed those states that the Centre would supply foodgrains to them at minimum support price (MSP)-derived prices for the above poverty line (APL) categories instead of NFSA-prescribed prices of Rs 3, Rs 2 and Rs 1 per kg for rice, wheat and coarse grains, respectively. The NFSA guarantees a monthly entitlement 5 kg of grain per person.

It implies that these states would have had to pay Rs 22.54 a kg for rice for their monthly allocations under the APL category, as against the Rs 8.30 a kg that they are paying now. For Tamil Nadu, it would have have resulted in an additional expenditure of Rs 2,730 crore. The state is also incurring an expenditure of Rs 2,393 crore annually on its universal PDS.

According to a Tamil Nadu government official, the southern state has started to implement the act from November 1 and would also continue with the universal PDS. While its monthly offtake of rice under the earlier Targeted Public Distribution System (TPDS), including the Antyodaya Anna Yojana, was about 3.23 lakh tonne, the Centre would continue to provide similar quantity as per NFSA requirements.

Following the NFSA roll-out, Paswan stated that the food ministry would continue to focus on PDS reforms. He stated that 71% out of around 24 crore ration cards have been seeded with the Aadhaar numbers of beneficiaries. This has resulted in the deletion of about 2.62 crore ration cards across states.

As part of PDS reforms, fair price shops are being automated for the distribution of foodgrains through an electronic point of sale (e-PoS) device that authenticates beneficiaries at the time of distribution and also electronically captures the quantity supplied.

As reported by FE earlier, of 5 lakh odd fair price shops in the country, 1.6 lakh have been equipped with e-PoS machines.

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