Food subsidy bill to rise by 27% to Rs 74,231 cr this year

The country's food subsidy bill is expected to jump by 27 per cent to Rs 74,231 crore in the 2010-11 fiscal, the Lok Sabha was told today.

This is due to a rise in support price and higher procurement and distribution of foodgrains via ratio shops. Last year, the government's food subsidy bill stood at Rs 58,242.45 crore.   

"The amount allocated for food subsidy during 2010-11 is Rs 59,354.56 crore...Based on the actual offtake, an additional requirement of Rs 14,877.63 crore has been sought for the current year," Food Minister K V Thomas said in a written reply.

The food subsidy bill rose due to an increase in procurement of foodgrains for the Central Pool, higher minimum support price and additional allocation of rice and wheat to the poor via ration shops and open market, he said.

The procurement cost of foodgrains has gone up but the selling price of rice and wheat via ration shops has been kept unchanged since 2002, he added.

The minister said the subsidy bill also increased due to higher offtake of subsidised foodgrains under the public distribution system and other welfare schemes.    

Currently, the government supplies 35 kg of rice or wheat at subsidised rates to 6.52 crore families living below poverty line (BPL) every month. Wheat is supplied at Rs 4.15/kg and rice at Rs 5.65/kg to BPL families.  

Depending on the foodgrains availability, the Centre also supplies the subsidised rice and wheat to 11.5 crore families living above poverty line (APL). Wheat and rice are sold to them at Rs 6.10/kg and Rs 8.30/kg, respectively.