The food ministry and the finance ministry are locked in battle over a suggestion mooted by Union Food Minister Sharad Yadav to double the number of families covered by the Antyodaya Anna Yojana (AAY).
AAY beneficiaries get foodgrain at the rate of 35 kg per family per month. The rates are Rs 2 per kg for wheat and Rs 3 per kg for rice.
AAY cards have been issued to 98.67 lakh families. The offtake is nearly 70 per cent, indicating that at this price, affordability is not a problem.
Realising this, and the fact that in places like Rajasthan the lack of availability of foodgrains could spiral into a serious political problem, the Food minister suggested that the project be expanded to include another 1 crore families from the estimated Below Poverty Line families.
Obviously this will deepen the extent of subsidy that the centre will have to provide. However, a dispute over the subsidy bill is holding up a cabinet note.
The Finance Ministry says that if carrying costs are included in the subsidy, the entire expanded package will end up costing Rs 2400 crore more.
However, according to Food ministry assessments, the additional 4.2 million tonnes of grain will cost only Rs 497 crore after deducting the cost of storage and handling.
The Food ministry says because the country's granaries are overflowing, it would make sense to redistribute this grain among those who really need it, rather than let it rot in silos.
It has worked out special priority groups even within the BPL categories like old people aged 60 years and above without assured means of subsistence, households headed by disabled adults, households headed by widows, terminally ill persons and their households and single women or men.
This scheme would also be extended to primitive groups and tribals who have not been covered so far.
Yadav's argument is the cost - both political and economic - of redistributing the grain far outweighs its losses.
The government has to pay for storage and handling any way so it is better to invest the money in distributing grain instead of storing it.
However, Finance Minister Jaswant Singh's argument is that the cost of carrying and redistributing the grain is far too high.
Under the circumstances, the Prime Minister might have to step in and resolve the impasse. If delayed too long, the political gains from the move will also be lost to the NDA government, the Food ministry has warned.
