PDS subsidy increases at a higher rate for APL category

The subsidy on foodgrains supplied through the public distribution system (PDS) has risen far higher for households falling in the above-poverty-line (APL) category than for those in the below-poverty-line (BPL) bracket during the five-year rule of the United Progressive Alliance.

Data released by the food and public distribution department last week indicates that the subsidy on rice has went up between 2004-05 and 2008-09 by 102.5 per cent for APL households, against only 65 per cent increase for BPL.

Similarly, the subsidy on wheat swelled by 91.4 per cent for APL, against only 61.7 per cent for BPL during this period.
 

FOODGRAIN SUBSIDY (In Rs per kg)
	2004-05	2008-09	% change
RICE
APL	4.74	9.60	102.5
BPL	7.39	12.25	65.0
WHEAT
APL	4.09	7.83	91.44
BPL	6.04	9.77	61.75
Source: Food Ministry

The actual subsidy on rice, which worked out to only Rs 4.74 per kg for APL in 2004-05, more than doubled to Rs 9.60 per kg in 2008-09. For the BPL people, this subsidy increased only from Rs 7.39 per kg to Rs 12.25 per kg in these five years.

The rise in subsidy in both cases is largely due to sharp increase in the cost of rice and wheat to the government without any hike in the issue prices of foodgrains for the public distribution system (PDS).

One kg of rice bought for the PDS, which cost the government Rs 13.04 in 2004-05 (procurement price plus levies and overheads), costs Rs 17.90 in 2008-09. Similarly, the cost of wheat has gone up during this period from Rs 10.19 per kg to Rs 13.93 per kg.

The issue price (at which the Centre supplies these grains to the states for the PDS) has remained static at Rs 8.30 per kg for rice for APL and Rs 5.65 per kg for BPL during all these years.

In the case of wheat, the issue price has remained unchanged at Rs 6.10 per kg for APL and Rs 4.15 per kg.