The Centre has decided to freeze the quantity of rice and wheat to be supplied at a discounted price to the Above Poverty Line (APL), also known as middle-class families, at 13.6 lakh tonnes a month.
Such 11.52 crore families would continue to get wheat at Rs 6.10 per kg and rice at Rs 8.30 per kg within this limit, but would be charged the minimum support prices (MSPs) of the foodgrains for allocation beyond 13.6 lakh tonnes a month, sources said.
The wheat MSP is Rs 10.80 per kg and that of paddy is Rs 9.00 a kg (including Rs 50 per quintal bonus) for common variety that translates into roughly Rs 13.45 a kg for rice.
The decision, taken at a meeting of the Group of Ministers (GoM) early this month, was aimed to check the food subsidy bill estimated at Rs 50,000 crore.
The GoM was also of the view that those states which were receiving higher APL allocation at the rate of more than 10 kg per family should not be disturbed, sources said. But, where the allocation is less, each APL family should receive at least 10 kg of wheat and rice every month, they added.
Though each APL family is entitled to receive 35 kg of foodgrain every month, the all India average is eight kg as allocation is less and also not uniform across the country.
While many states in the north-east have been allocated foodgrain at the rate of 35 kg per family, states like Uttar Pradesh, Gujarat and Maharashtra received at less than three kg per card holder, the sources pointed out.
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The decision will benefit 17 states and union territories -- Bihar, Chhatisgarh, Orissa, Jharkhand, West Bengal, Madhya Pradesh, Maharashtra, Rajasthan, Uttar Pradesh, Gujarat, Goa, Haryana, Karnataka, Chandigarh, Puducherry, Dadra and Nagar Haveli and Daman and Diu.
The monthly allocation of foodgrains under APL was 9.20 lakh tonnes in February and after the increase it will go up by 4.39 lakh tonnes per month.
But a substantial portion of the increased allocation would be wheat with 4.15 lakh tonnes and only 23 thousand tonnes of rice would be offered to states, the sources said.
Experts said this measure is temporary as the government has huge stocks of wheat from last year's crop and it wants to liquidate as much as possible to create storage space for next crop, the procurement of which begins from April 1 in two major contributing states -- Punjab and Haryana.
They also expressed apprehension about diversion of the wheat meant for APL population in traditional rice consuming states like West Bengal, Orissa or Chhattisgarh.
Out of record 226 lakh tonnes of wheat procured by the Centre last year, the stocks with the Food Corporation of India was 73.54 lakh tonnes as March 1 this year. This does not include 30 lakh tonnes of strategic reserve.
This year, the Centre has been informed by states that wheat procurement may go up to 244 lakh tonnes. Agriculture Ministry officials anticipate the wheat harvest to cross 78 million tonnes this year.