Will implementing Food bill entail Rs 1.12 lakh crore subsidy?

New Delhi: Implementation of the National Food Security Bill will entail a subsidy of a whopping Rs 1.12 lakh crore, Food and Consumer Affairs Minister K V Thomas informed the Rajya Sabha today.

According to 1993-94 poverty line and 2000 population census, food subsidy is Rs 88,976 crore and as per the 2011 census it is Rs 197,096 crore, he said during the Question Hour.

Additional food subsidy burden for 2012-13 is estimated at Rs 1,12,205 crore, he said adding that this is Rs 3000-4000 crore more than previous estimate "which the country can manage."


The National Food Security Bill provides that priority households will be entitled to receive rice at Rs 3 per kg, wheat at Rs 2 per kg and coarse grains at Rs 1 per kg.

General households, under the Bill, are entitled for food grains at a price not exceeding 50 percent of Minimum Support Price for wheat and coarse grain and not exceeding 50
percent of derived MSP for rice. "We need 561 lakh tons of foodgrains (for distribution through public distribution system) as per 1993-94 poverty line and 2000 census," he said.

"As per provisions of NFSB, and using 2011 Census population, the requirement of foodgrains for Targeted Public Distribution System (TPDS) and Other Welfare Schemes (OWS)
prescribed in the Bill, is estimated at 607.4 lakh tonnes," he said.

The Bill does not include sugar as legal entitlement. Thomas said the stock of foodgrains available in the Central Pool as on 1 March, 2012 is 544.3 lakh tonnes. The average annual procurement of rice and wheat during the last four years (2007-08 to 2010-11) has been about 570 lakh tonnes as compared to 382.2 lakh tonnes during 2000-01 to 2006-07.

The procurement of wheat during marketing season 2011-12 was 283.4 lakh tonnes and estimated procurement of rice during 2011-12 is 353.2 lakh tonnes.

During the Rabi Marketing Season (2012-13) the procurement of wheat is likely to go up to 318 lakh tonnes, Thomas said. "With the stock of foodgrains available in the Central
Pool and trends in procurement, it would be possible to meet the estimated requirement of foodgrains under NFSB," he said.

The bill has provisions to deal with unprecedented situations of floods and droughts, he said.

Thomas said foodgrain leakages has been brought down from 2.5 per cent to about 0.01 per cent.

To a separate question, Thomas said the C Rangarajan Committee on deregulation of sugar sector has been asked to submit its report within six months.

A Committee under the Chairmanship of C Rangarajan, Chairman, Economic Advisory Council (EAC) to Prime Minister, was constituted on January 20 to look into all the issues of
deregulation of sugar sector. While there is no time line fixed for the Committee to
submit its report, but "we have requested the Committee to give its report within six months," he added.


Updated Date: Mar 19, 2012 13:49 PM

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