Centre to share grain movement cost with states

Ration shop owners might get a higher margin on the grains sold to beneficiaries

To ensure quick rollout of the National Food Security Act (NFSA) across the country, the Cabinet Committee on Economic Affairs approved on Wednesday a proposal to enable the central government to share half the total expenditure on interstate movement of grain and the margins of ration shop owners.

As a consequence, the benchmark margin for ration shop owners for normal states would be Rs 87 a quintal; for special category states and Union Territories, it would be somewhere around Rs 160 a qtl. Till now, this varied between Rs 20 a qtl to around Rs 100 a qtl, and was paid by states, which added this to the retail price of grain sold through ration shops.

The total additional burden on the Centre because of the two decisions would be Rs 4,341 crore yearly.This sharing applies only to the 11 states that have fully implement  NFSA.

After the Food Security Act came into force in 2013, the final price at which foodgrains are sold through the ration shops has been fixed at Rs 3 per kg for rice, Rs 2 per kg for wheat and Rs 1 per for coarse cereals.

Sharing of the cost of transportation and ration owners margin, would compel the states to fix the retail issue price of wheat and rice. This sharing would be applicable only to those states which implement the NFSA in full. Till now, around just 11 state governments have fully implemented the Food Act, despite repeated extensions by the Centre.