Ahead of a crucial meeting, on the coming Monday, of a group of ministers to finalise the Food Security Bill, a consensus is emerging on a dual system of subsidy.
This is that families below the poverty line (BPL) be given food subsidy through direct cash transfer. And, those above the poverty line (APL) be distributed foodgrains at a level equal to the minimum support price (MSP) offered to farmers, which would be higher than current rate of rationed supply.
At present, the government grants 35 kg of grain each month for each family below the poverty line (BPL); there are 65.2 million of them. This is supplied at Rs 4.15 per kg for wheat and Rs 5.65 per kg for rice. APL families get 15-35 kg per month (it varies with the average offtake of the three previous eyars), at Rs 6.10 for wheat and Rs 8.30 for rice.
Grain is also distributed to around 24.3 million very poor families under the Antyodaya Anna Yojana.
Officials said the emerging consensus is that the difference between the price at which government purchases grain and that at which it sells them to BPL families will be transferred in cash to the beneficiary through a ‘smart card’ system. APL families would get it at the MSP, which is currently almost Rs 12 per kg for wheat and Rs 11 per kg for rice.
“Only the cost of storage and transportation for grain supplied to APL families will be borne by the central government and will be part of the food subsidy,” a key official said.
For BPL families under the current assessment, almost Rs 270 per month per family will be transferred through the new system. The beneficiary may purchase products of his choice through this money from a fair price shop. “The idea is also to make fair price shops more vibrant, to enable them to sell goods other than grain to BPL families,” the officials said.
Views on the Bill differed between the Prime Minister’s appointed panel under C Rangarajan and the Sonia Gandhi-led National Advisory Council over coverage of APL families.
