In order to avoid imports of grain for implementing the proposed food security Bill in years when monsoon fails, the government will include a provision in the Bill to allow beneficiaries to get cash instead of grain.
According to sources, the requirement of grain for the proposed food security cover would be 60 million tonne (mt), which is less than a third of the total production. The current procurement for the public distribution system and the buffer stocks is around 55 mt. The option of giving cash instead of grain would help the government handle the situation of lower procurement because of failure of monsoon.
A panel headed by Prime Minister’s Economic Advisory Council chairman C Rangarajan had said earlier this year that the National Advisory Council (NAC) proposals covering a large section of the population under the food Bill, if implemented, would have subsidy implications larger than the council estimated. This would lead to an inevitable dependence on imports, a high-cost option, the Rangarajan panel had said. It added that the NAC had underestimated the grain requirement for the ambitious programme and ignored the fact that if procurement was stepped up beyond a limit, it could lead to distortions in the open market. The food ministry concurs with these views of the panel.
“We are formulating a Bill which would take into account our storage capacities, besides incorporating some exigencies clause,? said food minister KV Thomas.
An empowered group of ministers (EGoM) on food on Monday had approved the food Bill which seeks to provide legal entilement subsidised grain to more sections of the population, apart from those below the poverty line.
According to the Bill, 75% of the rural households will get subsidised grain under the epochal law. Of these, 46% households would be considered as ‘priority’ category, and each person in these households will get the 7 kg of grain a month at heavily subsidised prices ? R2 per kg for rice, R3 for wheat and R1 for coarse grains. In case of urban centres, out of the 50% of the total households to be covered under the scheme, 28% would get ‘priority’ status.
The EGoM had opted to tread the middle path between the NAC and PMEAC. The NAC wanted legal entitlement to be extended to 90% of the rural households and 75% of the urban households. The Rangarajan Committee had raised concerns over the availability of grain for such a cover.