Food subsidy bill hit R45,125 cr on December 15, says Thomas

Written by fe Bureau | New Delhi | Updated: Dec 20 2011, 08:51am hrs
The Centre has released R45,125 crore towards food subsidy until December 15, in line with its budgeted subsidy of R60,572 crore for the current fiscal through March 2012.

Indias food subsidy bill rose to R62,929,56 crore in 2010-11 from R58,242.45 crore the year before, food and public distribution minister K V Thomas said in Parliament on Monday, a day after the Cabinet cleared the food security bill that proposes to widen the government's subsidised grain sales to feed the poor. The food subsidy in India, the worlds second most-populous nation, is expected to swell to R93,000 crore a year if the ambitious food security act is implemented, Thomas had said earlier this month. The bill aims to provide legal entitlement for subsidised grain to 75% of the rural households and 50% of urban households.

Food, fertiliser and fuel subsidies account for a bulk of the governments subsidy burden and are a key factor in the countrys widening

fiscal deficit.

The central government provides food subsidy to state-run Food Corporation of India and state governments for procuring grain under the decentralised procurement scheme to build official reserves and supply through public distribution system and other welfare programmes. As much as 48.87 million tonne of grain have been allocated for supplies through the PDS so far this fiscal, Thomas said.

Uttar Pradesh leads the pack of beneficiary states with allocation touching 7.11 million tonnes, followed by Maharashtra (4.64 million tonne). The minister said strengthening the PDS by improving the monitoring mechanism and vigilance is key to preventing large-scale pilferage.

Thomas also said around 87,000 tonne of grain was lost in FCI godowns until September in the current fiscal due to factors including moisture, rats, birds and general spoilage. Grain losses in the last fiscal had risen to 156,000 tonne from 1,31,000 tonnes in 2009-10 and 58,000 tonne in 2008-09, he added. Last year, opposition parties protested against the losses of grains at various government go-downs, accusing the government of not taking adequate measures to check such losses when many poor people are going to bed hungry everyday.

Separately, Agriculture minister Sharad Pawar told the Rajya Sabha that the central government is willing to lend a helping hand to states that want to export perishable items such as potato. He said the Centre is intervening in the market on the request of states for the procurement of horticulture commodities that are generally perishable and arent covered under the minimum support price scheme. The government's market intervention scheme is implemented to avoid distress sale by farmers when prices tend to fall below the cost of production. The agriculture minister said the procurement of potato can be done by agencies like NAFED, if state governments concerned bear half the losses incurred in such an operation.