The Centre on Thursday worked out an intermediate food distribution plan which it hopes will pass muster with the Supreme Court. The Court has ordered the government to distribute grain free instead of letting it rot in godowns.
An empowered group of ministers decided to expand the number of families under the poverty line by over 18%. These families will get wheat at Rs 4.15 per kg and rice at Rs 5.65 per kg.
The measure will save the government from a de facto nationalisation of the country?s trade in rice and wheat while ensuring a far larger number of people get cheap wheat and rice.
Food and agriculture minister Sharad Pawar told reporters after the meeting of the group of ministers headed by finance minister Pranab Mukherjee that as an interim measure, the government will release an additional 2.5 million tonne of wheat and rice to states at BPL prices for the next six months from its stock. He said a final decision on following through with the SC order will be taken up soon.
Atul Chaturvedi, CEO, Adani Wilmar said that in any case, the private sector now has a very limited role to play in India?s grain trade and it is the government which controls wheat and rice market as it is the biggest buyer and seller.
Pawar said the government will also overhaul the public distribution system (PDS). However, grain would be distributed at BPL rates and not free as laid down by a recent Supreme Court order.
A government source said as per the new estimate, the number of families considered below the poverty line will now rise to 7.71 crore from the existing 6.52 crore.
?The earlier number was as per the 1993-94 poverty estimate, which we have extrapolated to March 2010, because of which the number of BPL families has increased,? the source said.
The increase in the number of BPL families means the government’s monthly allocation of foodgrains will rise too, but as it is sitting on a huge buffer, it will not be a problem. However, the food subsidy bill will rise from the current Rs 67,000 crore estimated for this fiscal. At present, 35 kg of wheat and rice are distributed to every eligible BPL ration card holder. Wheat is sold at a subsidised rate of 4.15 per kg and rice at 5.65 per kg.
On August 31, the Supreme Court had taken strong exception to the government for not complying with its earlier order on distributing foodgrains lying idle in godowns to the poor.
A bench of justices Dalveer Bhandari and Deepak Verma told government counsel additional solicitor general Mohan Parasaran on August 31 to treat the court’s comments as an order. ?It is part of our order. You tell the minister (Sharap Pawar) about it.? Reacting to the court decision, MV Subramanium, managing partner of Narasu Flour Mills told FE: ?The quantity as specified by SC as rotting in government godowns in very small and distribution of this free of cost to poor people won’t have any impact either on public or private traders.? Former union agriculture minister YK Alagh said that if 50-60% of India’s population is classified as very hungry as laid down by the Supreme Court and are given free foodgrains, ?it will not only have an adverse impact on traders and private trade, but will also disincentivise farming in this country.?