Through the TPDS system, subsidised grain is given to both BPL and APL families, the offtake of grain allocated to BPL families is relatively higher.
In 2013-14, against an extra allocation of 10.2 million tonne of these two grains to be distributed to mostly APL families, states could take delivery of only half of the allocated amount. The government also makes extra grain allocation over TPDS to 200 poorest districts in the country.
Following a meeting by finance minister Arun Jaitley on measures to be taken for curbing inflation on Tuesday, a government statement said, keeping in mind the increase in the retail price of rice, it was agreed that government, through the FCI, would release more supplies to the states to be released through the public distribution system.
The FCI has a rice stock of 28.2 million tonne at the start of the month against a strategic reserve norms of 9.8 million tonne. This rice stock also includes 7.6 million tonne still with millers.
Food ministry officials attribute the low offtake to the lack of storage and distribution capacity in the states. Besides a food ministry official told FE even entire amount allocated under TPDS have not been distributed by many states.
FCI allocates grains timely while the states have been slow in taking possession, a food ministry official said.
Food minister Ram Vilas Paswan had stated that the government would be releasing additional rice stocks from government warehouses for supplies to the state governments.
Experts say that due to a significant rise in procurement in the last few years, the food ministry has been allocating extra grain to states for distribution to APL families.
Without dealing with leaky PDS system, simply allocating extra grain would not help in dealing with rising inflation, Ashok Gulati, chair professor, Agriculture, Indian Council for Research on International Economic Relations (ICRIER) and former chairman of the Commission for Agricultural Costs and Prices (CACP) said.
The FCI allocated common variety of rice meant for APL families at Rs 795 per quintal to the states while rice given to BPL families under TPDS is sold at Rs 565 per quintal. For the poorest families under the Antodaya Anna Yojana (AAY), the rice is allocated at Rs 300 per quintal.