LPG subsidy success: Modi govt's give-it-up campaign will now ask people to forego food subsidies

In a move aimed at cutting the rising food subsidy bill, the Modi government has written to all the state governments to work on the initiative. This call comes on the heels of the government's successful initiative to convince people to forego subsidy on cooking gas.

With regard to foregoing of LPG subsidy, the government has met with decent success so far, with over 1 crore households giving up their cooking gas subsidy. Of the 20 crore households benefiting from the LPG subsidy, 1 crore households have voluntarily opted to buy cooking gas cylinders at the market price. This has helped the government to directly transfer the subsidy amount to beneficiaries' bank accounts.

 LPG subsidy success: Modi govts give-it-up campaign will now ask people to forego food subsidies


With regards to the food subsidy bill, the Union food ministry has asked all the state governments to work on the Give-It-Up campaign under the Targeted Public Distribution System (TPDS), The Financial Express report said.

The government has earmarked Rs 1,45,338.60 crore for food subsidy in the current fiscal as against the revised estimate of Rs 135,172.96 crore for the previous fiscal. Total subsidies on food, fertiliser and petroleum have been pegged higher by over 3 percent to more than Rs 2.4 lakh crore for 2017-18.

Currently, India has around 5 lakh fair price shops, and the government wants these shops to highlight subsidy cost given for rice and wheat, so that people willing to give up their subsidy could be coaxed to give it up, the FE report says.

Presently, the government gives subsidy of Rs 21.09 per kg and Rs 29.64 per kg on wheat and rice.

However, the report suggests that the response may not be that positive as the subsidy is provided to around 82 crore people under the National Food Security Act (NFSA), while only 19 crore households enjoy LPG subsidy.

“We are constantly taking steps to ensure that only those who need highly subsidised foodgrains get them through TPDS,” the FE report said citing an official.

Although the government has asked people to voluntary give up their subsidies, it has been taking measures to plug diversion of subsidised foodgains like seeding of Aadhaar cards of 23 crore ration card holders and installing electronic point of sale (e-PoS) machines at fair price shops (FPSs), the report said.

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Updated Date: Apr 25, 2017 13:01:26 IST