Budget may provide Rs 5,000 cr to improve grain distribution
Plans to expand the bill food are a likely vote-winner for the ruling Congress but could worsen strained finances as a flagging economy crimps revenue.
The government is all set to roll out the estimated Rs 1 lakh crore Food Security Bill in the next fiscal year, which is likely to be a vote-winner for the UPA in the next general election in 2014, similar to what happened in 2009 when the NREGA was pitched as an electoral promise for rural voters.
Even though the implementation of the scheme is only likely in the second half of 2012, Finance Minister Pranab Mukherjee is likely to announce a token allocation of Rs 5,000 crore forstrengtheningthedistributionsystem to ''deliver the massive allotment promised under the scheme," reported the Economic Times today.
The food bill guarantees cut-price grains to 63.5 percent of the country's 1.2 billion people, and could cost the government around Rs 81,000 crore,an increase of about 34 percent over the budgeted food subsidy level in the current fiscal year. That includes the cost of additional grains that the Food Corporation of India, the state firm that procures on behalf of the government, would need to buy from farmers.
Indiacurrently spends Rs 60,572 crore for an existing food supply programme under the "Targeted Public Distribution System" for the needy. Food handouts are currently pegged to the 1993-94 poverty estimates and are in-line with 2000 census population figures.
The Food Bill, which seeks to cover 75 percent of rural households and 50 percent of urban dwellers, can boost the Congress's ratings but implementing the bill will costthe country nearly Rs 1,12,205 crore.A minimum of 46 percent of the rural population and 28 percent urban population, called priority households, will get 7 kg of foodgrains per month per person. Rice would be provided at 3 a kg, wheat at Rs 2 and coarse grains at Re 1 per kg.