Panel suggests 5 kg of subsidised grain to 67% of population

Says direct cash transfer in lieu of grain currently not desirable

A Parliamentary panel on the food security Bill has suggested providing legal entitlement of 5 kg of heavily-subsidised grain to each beneficiary per month, which would cover 67% of the country’s population.

The Standing Committee on Food, Consumer Affairs and Public Distribution, headed by Vilas Muttemwar, also said the direct cash transfer in lieu of grain entitlements at this juncture may not be desirable, suggesting that banking infrastructure and accessibility to banking facility need to be made available throughout India before introducing the cash transfer.

?The beneficiaries should get rice, wheat and coarse grain at R3, R2 and R1 per kg, respectively…. We have suggested that there should be a single category of beneficiary with uniform entitlement of 5 kg per person per month,” Muttemwar said after submitting the panel’s report to Lok Sabha Speaker Meira Kumar. The coverage under the proposed law should be reviewed after 10 years and rates after five years, he added.

However, the panel’s recommendations are contrary to the government’s Food Bill that divides beneficiaries into two categories ? priority households and general households ? and also promises a beneficiary belonging to the priority household 7 kg of subsidised grain a month.

?The committee found that entitlement of 7 kg or 11 kg would not be feasible considering the current production and procurement trends,? Muttemwar said.

At 5 kg per person per month, 48.8 million tonne of grain would be required for the public distribution system and another 8 million tonne for other social welfare schemes, he said, adding that this much quantity could be managed. The annual food subsidy requirement would also be lower at about R1,12,000 crore, he said.

?The report was adopted unanimously with one dissent note from CPM member TN Seema,? Muttemwar said. The panel agreed to the Bill’s provision to cover 75% of the rural and 50% of the urban population, he said.

Under the food Bill, a pet project of UPA chairperson Sonia Gandhi, the government has proposed that each beneficiary of the priority households get 7 kg of rice and wheat per month at R3 and R2 per kg, respectively. The general households would get at least 3 kg at 50% of the minimum support (MSP) prices of the grain. The Bill was introduced in the Lok Sabha in December 2011 and, then, referred to the Parliamentary committee.

The food ministry will now weigh changes proposed in the House panel’s recommendations and firm up a final proposal for the cabinet approval. Earlier, food minister KV Thomas had said the Bill could be introduced in the forthcoming Budget season of Parliament.

Although the Bill is touted to be the UPA’s biggest populist measure, several analysts have expressed concerns about its impact on government finances. A team of experts, headed by CACP chairman Ashok Gulati, says in a report that the government’s stated expenditure of R1,20,000 crore annually in the the national food security Bill (NFSB) is merely the tip of the iceberg. The report says the government would have to shell out as much as R6,82,163 crore over three years to implement the Bill and would hurt the farm sector in the long run as well.

The government has budgetted R75,000 crore as food subsidy during 2012-13, but officials say the actual subsidy may cross R100,000 crore because of a hike in paddy and wheat procurement prices.