To ensure sufficient supply during the lockdown, the government on Wednesday decided to increase the monthly quota of subsidised foodgrain by two kg per person, to seven kg, through ration shops for the 800-million beneficiaries under the National Food Security Act.
From an average allocation of 25 kg for a five-member family, this decision will push it up to 35 kg.
A rough estimate is that the central government will have to meet an additional burden of Rs 5,600 crore per month (Rs 67,200 crore per annum) in the coming financial year if it allocates two kg of rice to all the 80 crore beneficiaries and Rs 4,000 crore per month (Rs 48,000 crore per annum) if it allocates two kg wheat to all of them.
In 2019-20, the financial year which is to conclude the coming Tuesday (March 31), the Centre spent nearly Rs 2.19 trillion on food subsidy, showed the Union Budget's revised estimates. Of this, Rs 1.1 trillion was borrowed from the National Small Savings Fund.
The decision on increasing the monthly quota was taken by the Cabinet Committee on Economic Affairs (CCEA), headed by Prime Minister Narendra Modi.
For 2019-20, the economic cost of wheat would be Rs 27 a kg for the Centre, and will be provided at a subsidised rate of Rs 2 a kg. The economic cost of rice is about Rs 34 a kg but will be supplied at Rs 3 a kg.
All states have been asked to take foodgrain from the Centre in advance for distribution through the Public Distribution System, said Information and Broadcasting Minister Prakash Javadekar after the CCEA meet.
The decision was also taken as state-owned Food Corporation of India (FCI) is saddled with much excess wheat and rice stock. With some of this kept in open space, FCI is under pressure to clear the stock before the southwest monsoon.
Javdekar also reiterated that states have been allowed to lift foodgrain for three months on credit through FCI.