CCEA okays central assistance to states under food law

In order to ensure implementation of food law, the Cabinet Committee on Economic Affairs today approved central assistance to states/UTs for meeting the cost on foodgrain movement and ration shop dealers margin.
The Centre estimates that central assistance to the tune of Rs 4,341 crore would flow to states/UTs annually when the food security law gets implemented across the country.
Stating that implementation of food law has so far started only in 11 states/UTs, the Centre said it has extended the deadline for remaining 25 states/UTs to implement the food law till September 2015.
The Centre expects that the decision on central assistance will incentivise the states/UTs for early roll out of the Act.

The Food Security Law, which came into force from July 5, 2013, provides for legal entitlement to two-thirds of the population to get foodgrains at highly subsidised rate of Rs 1/2/3 a kg for coarse grain, wheat and rice respectively.
"The CCEA has approved the norms of the expenditure and pattern of central sharing on Central assistance to states/ Union Territories (UTs) under the National Food Security Act (NFSA) 2013.

"This assistance is used for meeting expenditure on intra-state movement and handling of foodgrains and FPS (fair price shop) dealers' margin," an official statement said.
The Centre will share 50 per cent of the expenditure in case of general States/UTs while it would contribute 75 per cent in case of special category States/UTs, which are the 7 states of North East, Sikkim, Himachal Pradesh, Jammu & Kashmir and Uttarakhand and Island UTs of Andaman & Nicobar Islands and Lakshadweep.

"The assistance will be available to States/UT where implementation of NFSA has started. The estimated financial assistance likely to flow to States/UTs annually, when the Act is fully implemented in all States/UTs, is Rs 4,341 crore," the statement said.
This decision will help in the smooth implementation of the NFSA and will benefit the people, it added.
"Implementation of NFSA has so far started only in 11 states/UTs. The period for identification of beneficiaries and implementation of the Act had to be extended twice, upto April 4, 2015 as its implementation is yet to start in the remaining 25 States/UTs.

"It has again been extended up to September 30, 2015 and it is expected that this decision on Central assistance will incentivise the States/UTs for early roll out of the Act," the statement said.
The 11 states/UTs which have implemented the food law are -- Punjab, Haryana, Rajasthan, Himachal Pradesh, Madhya Pradesh, Bihar, Chhattisgarh, Maharashtra, Karnataka, Delhi and Chandigarh.
The Centre agreed to bear this additional burden in the cost of transportation of foodgrains and margins to fair price shops to ensure that the beneficiaries will continue to get foodgrain at subsidised prices.