Food Bill to rise by Rs 2K cr if panel's report accepted

The government's total food subsidy Bill is estimated to increase by Rs 2,000 crore to Rs 83,000 crore if the recommendations of the PM's expert committee on National Food Security Bill are accepted.

However, the extra burden would grow by Rs 11,000 crore to Rs 92,060 crore if 75 per cent of the population is covered under the proposed food Bill as suggested by the National Advisory Council (NAC).

In the 2010-11 fiscal, the food Bill is likely to cross Rs 81,000 crore against Rs 72,000 crore last year.

The PM's panel, headed by PMEAC Chairman C Rangarajan, recommended that it would be feasible to cover only "priority households" (46 per cent of rural and 28 per cent of urban) under the proposed Food Bill.

The subsidy outgo to cover "priority households" and other welfare schemes and buffer stock was estimated at Rs 83,000 crore, it said.

Whereas the NAC, headed by UPA Chairperson Sonia Gandhi, has recommended legal entitlement on subsidised foodgrains to both "priority households" and "General households" including destitute and vulnerable groups. It has projected a total subsidy of Rs 79,931 crore.

While the panel has pointed out that it would be difficult to implement all proposals of NAC because of "large subsidy implications" and constraints of foodgrains availability.

It observed that NAC's total subsidy projection (Rs 79,931 crore) is on "lower side" and it is likely to be higher at Rs 92,060 crore assuming 100 per cent offtake of foodgrains and also considering the change in the population figures of the year, when the Bill would actually be implemented.

The subsidy is higher on account of scaling up of procurement, warehousing, imports and others, it added.