United Progressive Alliance Chairperson Sonia Gandhi’s pet project, the National Food Security Bill, got a major leg up in the Budget with an assurance from the finance minister to provide for related subsidies and its administration from 2012-13.
The subsidy estimates required to run the programme, which seeks to provide legal entitlement for cheap grains to almost 64 per cent of Indians, varies from Rs 95,000 crore to Rs 110,000 crore annually.
For the time being, the Budget provides for a three per cent rise in food subsidy over the Revised Estimate of 2011-12 at Rs 75,000 crore. The remaining subsidy requirement is expected to be provided in the course of the year.
To check leakages of foodgrains supplied through the public distribution system (PDS), the Budget also announced setting up a centralised national information utility for the computerisation of public distribution system under the guidance of the Unique Identification Authority of India Chairman Nandan Nilekani. The utility will start functioning from December 2012.
“Our effort now will be directed at better targeting and a leakage-proof delivery of the subsidies,” Mukherjee said in his Budget speech on Friday.
A draft proposal for such a network floated by Nilekani provides for a centralised authority, which will connect all the digitised ration cards currently being issued across the country.
The PDS network idea was welcomed by analysts as it will help in ensuring better delivery. “With almost 40 per cent of grains allocated through the public distribution system not reaching the targeted beneficiary, the commitment to start a public distribution system network is a welcome measure,” said an analyst.
The food and consumer affairs ministry’s allocation was raised by just 3.3 per cent, of which almost 98 per cent is non-plan expenditure in the form of food subsidy.
Though the finance minister has assured that all the subsidy requirements for the food Bill would be provided for during the year, a big question is whether the Bill could be implemented in the coming financial year. Food Minister K V Thomas had recently said the Bill was not likely to be passed in the current Budget session of Parliament. It is still with the standing committee as the consultation with states is not yet over, he added.
The Bill in its current form, has been bitterly opposed by a section of the civil society and also by some state governments. State governments are concerned that the Bill would take away their right to frame laws on the distribution of cheap grains to the poor.
The draft Bill seeks to provide legal entitlement to almost 75 per cent of the rural population and 50 per cent of the urban population. Of this, around 46 per cent will be priority category households in rural areas and 28 per cent will be priority category in urban areas.
Priority category individuals will get seven kg of grains per person a month, while the general category households will get three-four kg of grains per person a month.
Grains will be supplied to priority category households at Rs 3 per kg for rice, Rs 2 per kg for wheat and Rs 1 per kg for coarse grains. To the general category households, it will be supplied at a price which will be 50 per cent of the prevailing minimum support price.
