Two months after the BJP came to power by promising distribution of rice at Rs 2 per kg to below poverty line (BPL) families, its government in Karnataka has decided to put the promise on the back-burner for an indefinite period. Reason: The government does not have enough money to support the scheme.
“The financial implications are huge. The state will lose over Rs 300 crore per annum if the rice supplied through the public distribution system is further subsidised. We cannot afford this at a time resource mobilisation is a problem,” a finance department official told Business Standard.
Accordingly, the government neither made any announcement about the rice scheme in the budget presented 20 days ago nor did it comment on it during the Assembly session that ended today.
The scheme was one of the major promises in the BJP manifesto. The party, which went on a high-decibel campaign over the impact of rising prices on the common man, had assured to supply 20 kg rice per month for Rs 2 per kg to each BPL family.
“When I made the promise, the price of rice was Rs 13.50 per kg in the open market. We could have supported the scheme at that price. But a kilogram of rice now costs over Rs 20 and that makes it difficult for us to start the scheme,” said Chief Minister BS Yeddyurappa.
Currently, the state purchases rice at Rs 5.65 per kg from the Centre and sells it at Rs 3 per kg to BPL families. If the state has to procure additional rice from the Centre, it will have to pay Rs 8.30 per kg. “When we are finding it difficult to absorb this, how can we think of reducing the price to Rs 2 per kg?” said an official.
Though the opposition Congress and the JD(S) slammed the Yeddyurappa government, BJP leaders are not alarmed. “Populist measures can be counter-productive for parties in power. What is the point in offering sops when there are not enough resources?”said a BJP minister, admitting that not much thought was given to the scheme when it was conceptualised. Yeddyurappa tried to downplay the issue.
“We are implementing several other welfare programmes for the poor in lieu of the rice scheme. We have decided to pay Rs 2 per litre to dairy farmers for milk.”
Another major hurdle in implementing the rice scheme is lack of clarity on the number of BPL families in the state. While some in the government peg the number at around 4 million, others point to surveys that counted around 6 million such families.
With the government thinking of raising the income ceiling for being categorised as BPL from Rs 11,800 per annum to Rs 30,000, more families would be eligible to get subsidised rice under the public distribution system and that would invariably force the state to do some belt-tightening.
