Cabinet approves norms of expenditure on Food Security assistance to states/UTs

The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has approved the norms of the expenditure and pattern of central sharing on central assistance to states/Union Territories (UTs) under the National Food Security Act, 2013 (NFSA).

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This assistance is used for meeting expenditure on intra-state movement and handling of foodgrains and FPS dealers' margin.

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The special category sates/UTs are the seven states of North East, Sikkim, Himachal Pradesh, Jammu and Kashmir and Uttarakhand and UTs of Andaman and Nicobar Islands and Lakshadweep.

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This decision will help in the smooth implementation of the NFSA and will benefit the people.

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The assistance will be available to states/UT where implementation of NFSA has started. The estimated financial assistance likely to flow to states/UTs annually, when the Act is fully implemented in all States/UTs, is Rs. 4,341 crore.

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Accepting the recommendations of the 14th Finance Commission the government had hiked the share of states in central taxes, from 32 percent to 42 percent, increasing availability of funds at their end.

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In spite of the reduced share of Government of India, the GOI has agreed to this additional burden in the cost of transportation of foodgrains and margins to fair price shops to ensure that the beneficiaries will continue to get foodgrain at subsidised prices.

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Implementation of NFSA has so far started only in 11 states/UTs. The period for identification of beneficiaries and implementation of the Act had to be extended twice, up to 04.04.2015 as its implementation is yet to start in the remaining 25 sates/UTs.

It has again been extended up to 30.09. 2015 and it is expected that this decision on central assistance will incentivise the states/UTs for early roll out of the Act.

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The National Food Security Act came into force with effect from July 5, 2013. It, amongst other things, provides for legal entitlement to two-thirds of the population to receive foodgrains at highly subsidized prices of Rs. 1/2/3 per kg for coarse grains/wheat/rice respectively.