Will entitle 75% of rural homes and half of urban ones to subsidised grain; NAC recommendations diluted.
Diluting some recommendations of the Sonia Gandhi-led National Advisory Council (NAC), an empowered group of ministers (eGoM) today cleared the draft Food Security Bill, which has proposed a legal entitlement for subsidised grain to 75 per cent of rural households and 50 per cent of urban households.
The NAC had suggested that cheap grain be provided as a matter of right to 90 per cent of the country’s rural households and 50 per cent of urban households.
However, the categorisation of priority households, similar to the current one for below poverty line families, have been kept unchanged at 46 per cent of the country’s rural population and 28 per cent of the urban one. Officials said 68 per cent of the country’s 1.2 billion population will have a legal entitlement for grains after the bill was enacted, almost the same as the current coverage under the targeted public distribution system.
| GRAIN GRIN |
| * Categorisation of priority households similar to BPL families kept at 46 per cent of rural and 28 per cent of urban population |
| * Almost 68% of the country’s population will be entitled to grains after the Bill is enacted |
| * Export of 1 million tonnes of non-basmati rice and 650,000 tonnes of wheat products cleared |
| * The country’s food bill will rise to around Rs 94,987 crore after the food Bill is implemented, involving an additional outgo of almost Rs 13,000 crore annually |
The draft bill, touted as the second most important legislation of the United Progressive Alliance after the Mahatma Gandhi National Rural Employment Guarantee Scheme, will now be vetted by the law ministry and then placed before the cabinet.
The food ministry also plans to seek the views of state governments before the bill is tabled in Parliament during the coming monsoon session. “There was general agreement on the draft food bill prepared by the food ministry and all the members in the eGoM have agreed to endorse that,” said a senior food ministry official who participated in the meeting.
IMPLICATIONS
Officials said after the bill was enacted, the country would need to raise annual grain procurement to around 61 million tonnes. At present, average annual grain procurement is 55-60 mt.
On the food bill, official sources said it had been decided that the priority category household (also loosely classified as below poverty line families) will be supplied seven kg of grain per person per month, while general category households (above poverty line families) will be given three to four kg of grain per person per month.
“Rice will be given to priority sector households at Rs 3 per kg, wheat at Rs 2 per kg and coarse cereals at Rs 1 per kg,” the official said.
For the general category households, grains will be supplied at a price related to the minimum support price, he added. Officials estimate that the country's food bill will rise to around Rs 94,987 crore after enactment, involving an additional outgo of almost Rs 13,000 crore annually.
EXPORT
The eGoM also cleared the export of a million tonnes of non-basmati rice and decided on an ‘in-principle’ approval to export of wheat. “The export of rice has been allowed because of bulging stocks. For wheat, the quantity and timeframe will be decided at a later stage, after taking into consideration the situation in the international grain market," the official said.
India had banned wheat and rice exports in 2007 and 2008, respectively, after prices flared in the local markets and government purchases dropped to record lows.
However, there has been a demand for opening of exports because grain stocks in the central pool has swelled to over 65 mt, while storage space with Food Corporation of India (FCI) and state agencies is not more than 63 mt.
The group of ministers also decided to export 650,000 tonnes of wheat products.
It decided to export 300,000 tonnes of rice to Bangladesh and another 500,000 tonnes of rice through other countries on a government-to-government basis, the modalities for which would be worked out in consultation with the external affairs ministry.
“Export of another 500,000 tonnes of wheat has also been okayed, through diplomatic channels,” the official said.
