Par panel says food subsidy still very high, scope for further reduction

A parliamentary panel has appreciated the government's efforts to cut the food subsidy bill but said it is still "very high" and there is scope for further reduction.

The Standing Committee on Food, Consumer Affairs and Public Distribution tabled a report in the Lok Sabha on Tuesday.

"The Committee note that allocation of funds - in respect of food subsidy during 2021-22 is Rs 2,90,573.11 crore but actual expenditure as on February 11, 2022, is Rs 2,20,445.61 crore only i.e. 76 per cent of allocation.

"However, the Committee appreciate the efforts being made by the Department for reducing the Bill on food subsidy during 2021-22 in comparison to 2020-21. However, the Committee feel that it is still very high and there is still scope to reduce it further," the report said.

The Committee urged the department to optimise the food subsidy bill without compromising the demands of beneficiaries as well as being prepared for addressing unwarranted situations like the COVID-19 pandemic in future by preparing a backup plan, it added.

The panel also regretted that after 24 years of launching of Decentralized Procurement Scheme (DCP), the same has been adopted by only nine States/UTs for wheat and 16 States/UTs for rice.

It suggested that the department should make earnest efforts to motivate the remaining States to adopt the scheme.

The committee applauded the government for launching Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) to provide an additional allocation of food-grains from the central pool at 5 kg per person per month free of cost for all the beneficiaries covered under the National Food Security Act (NFSA) for a total period of 19 months during the year 2020-21 and 2021-22.

It asked the department to make an objective assessment to find out the impact of this scheme on beneficiaries and how long it needs to be continued further.

On the sugar sector, the committee pointed out that Rs 16,612 crore sugarcane arrears are outstanding.

"Though, the cane price arrears have reduced considerably but they are still very high. The committee is surprised to note that despite the provisions for making payment of sugarcane within 14 days of the supply of sugarcane by the farmer, it is rarely done," the report said.

The cane price arrears pertaining to the sugar season 2016-17 and earlier are still outstanding and no action has been taken against the sugar mills for the recovery of cane price arrears along with the interest at 15 per cent as per the provisions of Sugarcane (Control) Order, 1966.

"The committee feel that non-payment of sugarcane arrears in time can be discouraging and might refrain the farmers from growing sugarcane and they may be forced to opt out for growing other crops," the report said.

The sale of ethanol to OMCs (oil marketing companies) at remunerative prices has increased the liquidity of sugar mills.

This makes it more imperative on the part of sugar mills to clear the arrears of the farmers at the earliest.

"The committee feel that farmers need to be paid remunerative price immediately on delivery of their Agricultural Produce. They, therefore, strongly recommend the department to take appropriate measures by pressing on the sugar Mills in order to liquidate all the arrears and ensure immediate payment to the farmers," the report said.