An inter-ministerial panel has recently decided that publicity measures would be undertaken to educate people about the central government’s share in subsidies disbursed through PDS and other agencies.
Aware that there is little or no idea among the masses that it is the Centre, and not the state governments, that provides heavily-subsidised grains under the Nation Food Security Act (NFSA), the Union government will soon commence a campaign to change the perception among beneficiaries who it thinks are often misled to believe that the public distribution system (PDS) is largely financed by state governments.
An inter-ministerial panel has recently decided that publicity measures would be undertaken to educate people about the central government’s share in subsidies disbursed through PDS and other agencies. The information will likely to be on the electronic slip printed by the e-point of sale machines (ePoS) or by mobile messaging after a beneficiary avails rice/wheat at the PDS outlets through biometric authentication. In the case of fertiliser, the subsidy amount by the Centre would be printed on the sealed bags itself, an official said.
Addressing an election rally in Odisha on April 16, Prime Minister Narendra Modi had criticised the Naveen Patnaik government for misleading people about the Rs 1 rice scheme administered by the state government. “The government of Chowkidar in Delhi procures rice at Rs 29-30 per kg and dispatches it to Odisha. The Odisha government contributes only Rs 2 per kg to it. However, they claim that they provide rice at a subsidised rate to the people of Odisha. It’s an utter lie,” Modi said. The state government was not disclosing that the bulk of the subsidy on rice was borne by the Centre, he added.
According to officials, food grains are issued by the Centre to the states via the Food Corporation of India for PDS distribution at a highly subsidised rate of Rs 3/kg for rice, Rs 2/kg for wheat and Rs 1/kg for coarse grains as per the NFSA. In the case of rice, the Centre provides Rs 33 subsidy as it realises only Rs 3/kg as against an economic cost of about Rs 36/kg (procurement, transportation, processing, storage etc).
Currently, the Centre supplies 5 kg of subsidised food grains to each person/month to over 81 crore people via five lakh ration shops in the country, costing the exchequer about Rs 1.4 lakh crore in 2018-19.
The appropriation of credit by the states (on heavily subsidised rice by the Centre) began with Tamil Nadu in 2011 when the state government had decided to absorb the entire Rs 3/kg charged by the Centre by distributing rice for free at PDS outlets, thereby garnering huge political mileage.
Many other state governments such as Andhra Pradesh and Assam have since followed the footsteps of Tamil Nadu and Odisha by either distributing free rice or charging Rs 1/kg.
Similarly, the Centre spends some Rs 70,000 crore annually to heavily subsidised fertiliser for farmers, but two-thirds of beneficiaries have no idea that they receive the largesse, according to a survey by consulting firm MicroSave. While the production cost of gas-based urea is about Rs 900 per 45-kg bag, farmers get it for Rs 242, at a discount of over 70%.