Govt may delay new levy sugar mechanism in some states

Discusses methods to implement Food Security Bill

The government will soon review the preparedness of states to implement a new mechanism for distribution of sugar through ration shops and might consider either delaying its implementation or granting some exemption from the new system to few states, a senior food ministry official said today.

He said the meeting has been called in view of concerns expressed by some states on their readiness to implement the new system for distributing sugar through ration shops.

As per the new system government will  reimburse a fixed amount at the rate of Rs 18.50 per quintal of sugar to the states for distributing cheap sugar through ration shops instead of directly allocating sugar to them.

However, it might lead to ration shops going dry from June 1 in many states as Centre has sugar stocks only till May 31, while many states have not yet accepted the mechanism.
 
The states will have to purchase sugar from the open market for distribution through the ration shops through an open tender and sell it at the existing fixed rate of Rs 13.50 per kilogram. The difference between the purchase price and sale price will be reimbursed by the Central government to the state but only to the extent of uniform Rs 18.50 per kilogram.

The mechanism has been approved by the union cabinet few months back in line with the recommendations of a Committee headed by chairman of Prime Minister’s Economic Advisory Council (PMEAC), C Rangarajan.

Food Bill

The government today reviewed the preparations for implementing the ambitious food security bill. The Bill who is awaiting approval from Parliament seeks to provide legal entitlement for cheap grains to almost 67% of the Indian population.

Officials said in a high-level meeting chaired by finance minister P Chidambaram all possible options to expedite the implementation of the Bill was discussed.

“A section in the government was of the view that the Food Security Bill should be implemented either through ordinance or by usual practice of getting it cleared by the Parliament, but food ministry is of the opinion that the best possible solution could be get Parliament nod for the same,” a senior official who was present in the meeting said.

Food Minister K V Thomas and Parliamentary Affairs Minister Kamal Nath were part of the deliberations.
The draft National Food Security Bill promises 5 kilograms of wheat or rice or coarse cereals to every identified person per month at Rs 3 per kg for rice, Rs 2 for wheat and Rs 1 for coarse cereals.