‘Increase PDS price of grains to cut food subsidy’

By: |
January 30, 2021 2:45 AM

The CIP is the price at which wheat and rice are sold at ration shops and there has been no change in these prices since 2013 – wheat at Rs 2/kg and rice at Rs 3/kg.

The Centre’s procurement expenditure routed through the FCI has ballooned over the years and is estimated at Rs 1.73 lakh crore in FY20.The Centre’s procurement expenditure routed through the FCI has ballooned over the years and is estimated at Rs 1.73 lakh crore in FY20.

The Survey recommended an increase in selling prices of wheat and rice under the National Food Security Act (NFSA). As the food subsidy bill is “becoming unmanageably large” and while it is difficult to reduce the economic cost of food management in view of rising commitment towards food security, there is a need to consider the revision of central issue price (CIP) to reduce the bulging food subsidy bill, the Survey noted.

The CIP is the price at which wheat and rice are sold at ration shops and there has been no change in these prices since 2013 – wheat at Rs 2/kg and rice at Rs 3/kg. Though NFSA prescribes revision of the CIP in every three years, it hasn’t been carried out. The Centre’s procurement expenditure routed through the FCI has ballooned over the years and is estimated at Rs 1.73 lakh crore in FY20.

According to the survey, remunerative markets for agricultural products should be the main focus of post-production management. It hasn’t, however, made any specific suggestions on how to achieve this end. Other new suggestions by the Survey includes the setting up of rural agricultural schools for hands-on training and village-level procurement centres.

Strongly supporting the new farm laws, which have become a source of friction between the government and a section of the farming community, the Survey noted that the reforms in agriculture marketing would not only generate employment but also cut post-harvest losses, estimated at Rs 44,000 crore/year. The Supreme Court has recently stayed the implementation of the three contentious farm laws, in its effort to find a solution to the vexed issue of prolonged agitation by farmers.

Arguing that the farm laws also helped address “supply-side structural reforms to lend flexibility and resilience to supply chains” as a part of the Atmanirbhar Bharat Mission, the Survey said this far-sighted policy response would generate productivity gains in the medium to long term.

The reforms in the primary sector (agriculture and mining) contributes around 16% of Gross Value Added (GVA) while it employs around 43% of the workforce.

The share of agriculture and allied sectors in GVA of the country at current prices was 17.8% during 2019-20, according to May 2020 estimates of national income released by Central Statistical Office.

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