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The food ministry has floated the idea that the subsidy given by the government for running grain-based welfare schemes other than the Public Distribution System (PDS) be borne by the departments concerned, and not be transferred to the ministry’s account.
The plan is to reduce the amount of food subsidy which has become imperative as the National Food Security Act (NFSA), once fully implemented across India, will cover more than half the country’s population, negating the need for separate allocation of grains to other departments. If the departments still want to run welfare schemes, they could do so bearing their own subsidy burden.
So far, NFSA has been rolled out in 11 states and Union Territories. The Centre has set a deadline of April 4 for all states to implement the law, which aims to provide legal entitlement to five kg of subsidised foodgrain per person per month at Rs 1-3 a kg for two-thirds of the country’s population.
At present, the department of food and public distribution supplies wheat and rice for PDS and other schemes like mid-day meal run by the human resource development ministry, the nutrition programmes run by the women and child development ministry, besides welfare homes like jails and nari niketans.
The entire subsidy for these programmes, run by various ministries and departments, is billed to the department of food, inflating the already high food subsidy.
According to the ministry’s proposal, the subsidy accruing to these departments and schemes should be borne by them, and not passed on the food department.
“This should lower the overall amount as the subsidy on one scheme alone was around Rs 2,750 crore in 2013-14,” a senior official said. And, there were six to seven such schemes.
The total food subsidy that year stood at Rs 92,000 crore, against Rs 85,000 crore in 2012-13. For the current year, the total subsidy is pegged at Rs 1,15,000 crore.
The plan might not lower the overall subsidy burden on the exchequer but would transfer it from one account to other, the official said.
He, however, said the change in accounting would help reflect the true picture of expenditure on a scheme and lead to better control and ownership of the scheme by the department concerned.
A redistribution will also make food subsidy more compliant with the World Trade Organization rules. Recently, a high-level committee, set up by Prime Minister Narendra Modi, had held discussions on this issue.
The nine-member panel, chaired by Food Minister Ram Vilas Paswan, included Commerce Minister Nirmala Sitharaman, Power Minister Piyush Goyal, Chief Economic Advisor Arvind Subramanian and Food Secretary Sudhir Kumar as members.
The plan is to reduce the amount of food subsidy which has become imperative as the National Food Security Act (NFSA), once fully implemented across India, will cover more than half the country’s population, negating the need for separate allocation of grains to other departments. If the departments still want to run welfare schemes, they could do so bearing their own subsidy burden.
So far, NFSA has been rolled out in 11 states and Union Territories. The Centre has set a deadline of April 4 for all states to implement the law, which aims to provide legal entitlement to five kg of subsidised foodgrain per person per month at Rs 1-3 a kg for two-thirds of the country’s population.
At present, the department of food and public distribution supplies wheat and rice for PDS and other schemes like mid-day meal run by the human resource development ministry, the nutrition programmes run by the women and child development ministry, besides welfare homes like jails and nari niketans.
The entire subsidy for these programmes, run by various ministries and departments, is billed to the department of food, inflating the already high food subsidy.
According to the ministry’s proposal, the subsidy accruing to these departments and schemes should be borne by them, and not passed on the food department.
“This should lower the overall amount as the subsidy on one scheme alone was around Rs 2,750 crore in 2013-14,” a senior official said. And, there were six to seven such schemes.
The total food subsidy that year stood at Rs 92,000 crore, against Rs 85,000 crore in 2012-13. For the current year, the total subsidy is pegged at Rs 1,15,000 crore.
The plan might not lower the overall subsidy burden on the exchequer but would transfer it from one account to other, the official said.
He, however, said the change in accounting would help reflect the true picture of expenditure on a scheme and lead to better control and ownership of the scheme by the department concerned.
A redistribution will also make food subsidy more compliant with the World Trade Organization rules. Recently, a high-level committee, set up by Prime Minister Narendra Modi, had held discussions on this issue.
The nine-member panel, chaired by Food Minister Ram Vilas Paswan, included Commerce Minister Nirmala Sitharaman, Power Minister Piyush Goyal, Chief Economic Advisor Arvind Subramanian and Food Secretary Sudhir Kumar as members.
