Food security law could double subsidy bill

Written by Press Trust of India | New Delhi | Updated: Aug 1 2010, 04:15am hrs
The country's food subsidy bill could nearly double to Rs 1,07,381 crore if the government decides to supply 35 kg of foodgrain at cheaper rates to the poor under the proposed Food Security Act.

In the 2010-11 Budget, the government had estimated the food subsidy at Rs 55,578.18 crore.

...taking 2011 population figures, average family size of 5.5 and 37.2% poverty estimates, the annual subsidy required for all beneficiaries at 35 kg per family per month would be 1,07,381.40 crore, food and agriculture minister Sharad Pawar informed Parliament on Friday.

The cost for supplying 25 kg per family per month could be Rs 76,717.29 crore, he said. The amount the government is going to spend under the proposed Act would depend on several factors such as economic cost, Central issue prices, categories of beneficiaries and scale of issue of essential commodities, he added.

Though the draft Food Security Bill was cleared in March, it is yet to be finalised as the government is still working on fixing the quantity of foodgrain to be supplied and the number of beneficiaries to be covered under the proposed Act.

In April, the Planning Commission was asked to provide an estimate of the number of BPL families in the country. Based on the Tendulkar Committee report on poverty estimation, the commission pegged the number at 8 crore.

At present, the government recognises 6.52 crore BPL families.

The Act, which was promised by the President in her speech to the joint session of Parliament, aims to provide 25 kg of rice or wheat per month at Rs 3 per kg to every family below poverty line (BPL).