Economic Survey: Food subsidy burden spurts 20%, agri investment need of the hour

The Economic Survey 2014-15 has said that food subsidy of the government surged a 20 percent to Rs 107,823.75 crore in 2014-15 (up to January 2015), increasing the burden on the government finances. “An amount of Rs. 107823.75 crore has been released as Food Subsidy during the year 2014-15 (upto January 9, 2015). This is a substantial increase of 20.15% over 2013-14 when an amount of Rs. 89740 crore was released as food subsidy,” the survey said. [caption id=“attachment_2125625” align=“alignleft” width=“380”]  Reuters[/caption] This forms 93.75 percent of the Rs 115,000 crore allocated in the Budget 2014-15. For food subsidy, the government has allocated , which include a provision of Rs 88,500 crore for implementation of National Food Security Act In comparison, last financial year the rise was just 6 percent, data from the survey showed. The survey noted that the subsidy bill in this criteria has increased substantially over the past few years putting a severe strain on the public exchequer. Provision of minimum nutritional support to the poor through subsidized foodgrains and ensuring price stability in different states are the twin objectives of the food security system, it said. The survey has pointed out that while the economic cost of wheat and rice has continuously gone up, the issue price has been kept unchanged since 1 July 2002. “This has resulted in large amounts of subsidy on foodgrains distributed through the TPDS/NFSA and other welfare schemes,” it said. It has also urged for rationalisation of subsidies and better targeting of beneficiaries. This would release resources for public investment in agriculture, where research, education, extension, irrigation, fertilizers, and laboratories to test soil, water and commodities, warehousing and cold-storage are starved of funds. The focus of public expenditure for agriculture so far has been on provision of subsidies and it is time it shifted towards investments to boost productivity, the survey said.