The announcement of one rupee a kilo rice scheme by Chief Minister Naveen Patnaik on the Republic Day, touted as a game changing move by the supremo of the regional outfit, Biju Janata Dal (BJD) keeping an eye on the coming elections, will cost the state exchequer about Rs 180 more in the next fiscal.
The state has been providing rice at Rs 2 per kg to above five million BPL (below poverty line) families since 2008 as per its pre-poll commitments, which cost the state Rs 720 crore in annual food subsidy. If the new price becomes applicable, then it will need to shove out Rs 180 crore more.
“Rs 180 crore expenditure is not a big amount for a state government whose total annual budget stands at over Rs 53,000 crore. The government can easily absorb the extra amount if it effectively monitors VAT collections and stamp duty and land registration fee collection,” said Bhagabat Patra, professor of economics at Berhampur University.
The state government has been bearing Rs 4.50 per kg burden for its cheap rive scheme and after the recent announcement, the burden will go up to Rs 5.50 per kg, he explained. The Biju Janata Dal (BJD)–led government has been providing cheap rice to poor families by making adjustments in the centrally sponsored food subsidy scheme. While the central government’s Antodaya scheme is meant to provide 35 kg rice per month to BPL families at Rs 5.56 rupees per kg, the state government has been providing 25 kg rice per month to BPL families at Rs 2 per kg.
The state government said, it has been providing reduced quantity of 25 kg rice, instead of the mandated 35 kg, in a bid to cover more BPL families. The state is providing the benefit to 48.58 lakh BPL families while the Centre has assessed the beneficiaries at 42.32 lakh.
However, the Comptroller and Auditor General (CAG) of India has rapped the state for diverting the central government fund illegally and criticised the government for using the scheme as a tool to win 2009 elections.
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The Chief Minister has announced that the new rates, which will help the poor families across the state and all citizens of poverty-stricken Kalahandi-Bolangir-Koraput district, will be applicable from the February this year. The scheme is expected to benefit 5.8 million families, who can consume up to 1.74 million tonne rice at subsidised rates.
For 2012-13 financial yea, the state government has projected to procure 3 million tonne rice at Rs 1,250 per 100 kg support price, higher than Rs 2.8 million tonne target set for 2011-12.