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The central government is mulling several options to bring down the subsidy burden on account of the Food Security Bill.
As a measure, the deadline of August 2014 which was earlier given to the states to roll out with National Food Security Bill (NFSB) may be further extended. Some section of the government and concerned food ministry is even considering elimination of any deadline.
According to official sources, it is national scheme and depends on the preparedness of indivisual states to roll it. This is because the subsidy amount on account of this scheme is to be borne by both the centre and state.
While the centre is committed to bear the subsidy burden on account of the bill, its share to the states will depend on the number of states opting for its immediate implementation, said sources.
Earlier, the Centre had decided to give state governments one year instead of the proposed six months to roll out its food security scheme as a result of which all the states are to abide by the deadline of August 2014 to roll out the Food security scheme.
Under the scheme. the central government will provide funds to states in case of short supplies of foodgrains.The state government on the other hand will provide a food security allowance to the beneficiaries in case of non-supply of foodgrains.
The provisions of the new National Food Security Bill seeks to expand the value and reach of food subsidies provided through the Public Distribution System.
The Public Distribution System (PDS), one of the biggest anti-poverty programmes of the Indian government provides assistance to below poverty line (BPL) households in the form of a monthly quota of subsidised goods including rice, wheat, sugar, edible oil and kerosene, though a network of fair price shops.
While India’s existing food distribution system, the Targeted Public Distribution System (TPDS), is already enormous, the NFSB proposes to increase coverage to 75% of India’s rural population and 50% of the urban population – a whopping 800 million people.
The policy is estimated to be worth Rs. 1,30,000 crore or about $20 billion $while the state governments are tasked with identifying eligible households under the new initiative, which is expected to begin rolling out soon.
According to a report prepared by the Commission of Agricultural Costs and Prices (CACP), the stated expenditure of Rs 1,20,000 crore annually in NFSB is merely the tip of the iceberg.
To support the system and the welfare schemes as per the report, additional expenditure is needed for the envisaged administrative set up, scaling up of operations, enhancement of production, investments for storage, movement, processing and market infrastructure etc.
The existing Food Security Complex of Procurement, Stocking and Distribution- which NFSB perpetuates- would increase the operational expenditure of the Scheme given its creaking infrastructure, leakages & inefficient governance, stated the report.
The Commission concluded that the total bill for implementation of the Bill may touch an expenditure of anywhere between Rs 125,000 to 150,000 crores,i.e., 1.25 to 1.5 trillion rupees.
