The governments food subsidy bill is set to swell by Rs 2,400 crore next year with the implementation of the new targetted public distribution system (TPDS) aimed at giving wheat and rice to the poor at specially reduced prices and charging marginally higher prices from those living above the poverty bracket.
About 58.64 million households below the poverty line (BPL) will be entitled to buy 10 kg of foodgrain at Rs 2.50 a kg for wheat and Rs 3.50 a kg for common and fine varieties of rice under the TPDS. Those living above the poverty line (APL) will get their normal supplies at Rs 4.50 a kg for wheat, Rs 6.50 for fine rice and Rs 7.50 for super fine rice. The existing issue prices are, Rs 4.02 a kg for wheat, Rs 5.37 for common rice, Rs 6.17 for fine rice and Rs 6.48 for superfine rice. The TPDS and the new issue prices would come into effect in a particular state as and when it starts implementing the new system. The states have been given the option to expand the scope of the scheme if they are willing to meet the additional costs from their own resources.
While the total food subsidy in the current fiscal year would be contained within the budgeted figure of Rs 5,884 crore, it is estimated to go up to Rs 8,282.9 crore in 1997-98 with the new dual-price structure.
The decision about these prices, taken after prolonged deliberations at the steering committee and the standing committee of the ruling United Front (UF) and subsequently approved by the cabinet, was yesterday formally announced by Prime Minister H D Deve Gowda in the Lok Sabha and food minister Devendra Prasad Yadav in the Rajya Sabha. While the Left parties and other UF constituents generally welcomed the move, the Congress and the Bharatiya Janata Party (BJP) expressed misgivings about the utility of the new PDS for the poor.
Reacting to the statement in the Upper House, the Congress members said that it was merely a populist move taken by a fund-starved government in anticipation of an early mid-term poll. The BJP members felt that it would actually add to the hardships of both the poor and the non-poor as they would end up paying more for their monthly food bill.
Members, cutting across party lines, felt that the supply of 10 kg a month was too little for the poor households to meet their requirement and they would have to supplement it by purchasing grains at much higher prices from the open market.
The food minister pointed out that the current level of grain procurement and food stocks did not permit it to supply more than 10 kg of subsidised food to the BPL families having an annual income of less than Rs 1,500 a month. However, the persons employed under poverty alleviation schemes like the Employment Assurance Scheme (EAS) and the Jawahar Rozgar Yojana (JRY) would get an additional one kg of wheat or rice at the lower price for every manday of employment. While the concessional PDS grain would be available to the beneficiaries against the special cards to be issued by state governments, the employees of JRY and EAS would get the additional grains against coupons provided by the employers.
He said that about 32 crore people falling in the poverty bracket, as calculated by the Lakdawala Committee on the basis of 1993-94 data, would benefit from the new system.
Yadav made it clear that people above poverty line would gradually be taken out of the PDS network.
He also said that the Centre would not supply foodgrain to states at the new prices unless they were fully prepared to implement the new system. For this purpose, the Centre had set a deadline of May 31 for completing the task of identifying the poor, distributing special cards, setting up vigilance committees and creating other necessary infrastructure for the TPDS.
West Bengal was likely to be the first to introduce it in the next couple of weeks.
Some other states, including Kerala, Tamil Nadu, Haryana and Bihar, were expected to launch it by March 31. The entire country might be covered by May 31, 1997, Yadav said.
