EGoM to decide on poverty estimate

The empowered group of ministers (EGoM) will decide on the final poverty estimates to be used for the Food Security Bill, though the hurdle of building a consensus within states is yet to be overcome.

The Plan panel on Saturday accepted the poverty estimates, or population below poverty line (BPL), at 37.2 per cent of the total population (83.2 million BPL families) as stated by the Suresh Tendulkar Committee report in 2009.

Consensus-building process would be difficult because the number of BPL ration cards issued by the state governments, which is 108.6 million, is higher than any estimate of the central government, including that of the Tendulkar committee.

The EGoM will also have to take a call on the amount of foodgrain to be provided to every BPL family under the scheme. Even though initially the United Progressive Alliance (UPA) government had promised 25 kg of rice or wheat at Rs 3 per kg, the thinking is to increase the allocation to 35 kg under the scheme. Currently, under the targeted public distribution system (TPDS) under implementation since June 1997, allocations of foodgrain are made for 65.2 million BPL families. Allocations to states are being issued at the scale of 35 kg of wheat and rice per family per month.

Therefore, the EGoM might try to maintain the level of allocation at 35 kg per family per month. Estimates by Planning Commission in a preparatory draft, taking 2009-10 as the base year shows that if foodgrain are provided at 25 kg to 83.2 million families, the government procurement will be at 251.91 lakh tonne. This is 8.9 per cent lower than the current procurement in 2009-10 of around 27.68 million tonne. The decrease is primarily because the government now procures according to 35 kg per month for 6.52 crore BPL families. Under the new scheme and the new allocation at 25 kg per family per month, the procurement required would be less.

However, if the EGoM decides to provide for 35 kg of foodgrain per family per month to 8.32 BPL families, the procurement according to estimates will rise by 27.42 per cent to 35.27 million tonnes. Some states have also given proposals to transfer food subsidy as cash to identified BPL families on a pilot basis. The Planning Commission has noted that such a move would be “more efficient” and families will have the choice to buy the foodgrain themselves. Uttar Pradesh, Haryana and Delhi have submitted proposals for direct cash transfer to identified beneficiaries.

As of now, there is no consensus on the revenue implications. Planning Commission Deputy Chairman Montek Singh Ahluwalia had earlier said that food subsidy might go up by Rs 6,000 crore if the new poverty estimates are followed and the number of BPL families increases to 83.2 million from 65.2 million.

“These issues will come up in the meeting of chief ministers. These should be discussed. We will present the various options and what it implies at the state level and the Centre,” Ahluwalia said.

The Planning Commission is working on a paper to explore ways to revive the public distribution system and Ahluwalia said it is expected to come out in a couple of weeks.