Food security scheme likely to get Rs 5,000 cr in Budget

The UPA-2 government’s most ambitious social security programme, the national food security scheme, is likely to get Rs 5,000 crore as initial allocation in the 2013-14 Budget, to be presented by Finance Minister P Chidambaram on February 28.

The programme will start in 2013-14 and the Budget would provide this allocation, said officials in the know. “This sum has been kept aside for food security and will be different from the usual allocation of food subsidy,” an official said.

The Food Security Bill, which seeks to provide legal entitlement for cheap grain to almost 67 per cent of the population, has been vetted by a standing committee of Parliament. The department of food and consumer affairs is preparing a Cabinet note for a revised Bill, likely to be moved in the Budget session. (FOOD FOR THOUGHT)

Officials estimate the yearly food subsidy at Rs 1,20,000 crore to Rs 1,40,000 crore, depending on the quantity of food allocated under the Bill. The Budget had provided for Rs 75,000 crore in 2012-13, but the requirement is said to have swelled to more than Rs 95,000 crore.

In the 2013-14 Budget, the finance minister will try to strike a balance between various departments’ demands to rein in the fiscal deficit at 4.8 per cent of GDP from the 5.3 per cent estimated in the current financial year.

The Bill, tabled in Parliament, aims to give legal entitlement for cheap grain to 75 per cent of the rural population and 50 per cent of the urban population. It has split beneficiaries into priority and general categories. Each priority beneficiary would get seven kg of grain a month, while a general category beneficiary would get three to four kg.

However, the standing committee of Parliament on food had recommended the categories be merged. Each beneficiary should get five kg of foodgrain a month at Rs 3 per kg for rice, Rs 2 a kg for wheat and Rs 1 per kg for coarse cereals, it had said.

Officials said the first version of the Bill would have led to Rs 1,30,000-1,40,000 crore of food subsidy, while the parliamentary panel’s recommendations would result in an outgo of Rs 1,20,000 crore.

The panel’s suggestions would mean a grain requirement of 50 million tonnes (mt), almost the same as that under the current Targeted Public Distribution System. But the subsidy bill will increase.

The subsidy bill will go up due to a uniform lower price, against the differential pricing for below poverty line and above poverty line beneficiaries now.

Had the first version of the Bill’s proposal been kept intact, the requirement would have been 70 mt. All these numbers exclude the eight mt required for welfare schemes such as the Mid-Day Meal programme.

Lately, the food ministry made changes in the Bill to cover 90 per cent of the population in 13 states and 75 per cent in 250 identified districts. It was also proposed that the Antyodaya Anna Yojana targeting the poorest of the poor, be retained as it has been performing well. If these suggestions are incorporated, the government’s food bill could go up.