NEW DELHI: The government is set to offer additional foodgrains at subsidised rates to offload massive stocks piled up in granaries due to a liberal support price regime and also add a kilo of sugar to the monthly ration for beneficiaries under the National Food Security Act (NFSA).
Over the next few days, the Union Cabinet is expected to decide on providing additional 2 kg grains to every NFSA beneficiary on a monthly basis — a move that will increase the monthly quota to 7 kg. While 81 crore individuals stand to get more wheat and rice through the temporary move, nearly 19 crore families can now draw their quota of sugar.
Currently, only 2.4 crore Antodaya families are entitled to the supply of subsidised sugar through the public distribution system.
NFSA provides for a monthly quota of 5 kg foodgrain for all below poverty line individuals at highly subsidised rate of Rs 1, 2 and 3 per kg for coarse grains, wheat and rice, respectively. Households covered under Antyodaya Anna Yojana (AAY), which is targeted at the poorest of the poor, are entitled to 35 kg per household per month.
Politically, the new move may be seen as a post-election gift to the poor but it is meant to reduce the carrying cost of foodgrains.
Food Corporation of India spends Rs 29 crore on storage and handling of 1 lakh tonne of wheat and Rs 41 crore on 1 lakh tonne of rice. Going by this estimate, the FCI’s annual bill on account of carrying cost is more than Rs 26,000 crore.
An additional allocation of grains for six months will result in extra subsidy burden of around Rs 50,000 crore but will result in large savings in terms of the FCI’s carrying cost. The move to provide subsidised sugar at Rs 13.50 a kg will result in an additional burden of Rs 4,700 crore on an annual basis.
Against the buffer norm requirement of 41 million tonnes at the start of July, rice and wheat stocks with the FCI was estimated at around 75 million tonnes and will touch 80 million tonnes next month.