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LATEST NEWS UPDATES | Food Security: Subsidy to be extended, PDS to get cheap grain till fiscal end -Sandip Das

Food Security: Subsidy to be extended, PDS to get cheap grain till fiscal end -Sandip Das

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published Published on Aug 11, 2016   modified Modified on Aug 11, 2016
-The Financial Express

With a number of states commencing rollout of the National Food Security Act, 2013, only in the last couple of months, the government has decided to extend the rate at which highly subsidised grains are currently being supplied to states for distribution through the public distribution system (PDS) till end of the current fiscal.

Sources told FE that the Centre would continue to provide subsidy so as to enable states to give five kg of grain per beneficiary with rice, wheat and coarse grains priced at Rs 3, Rs 2 and Re 1 respectively, till the end of FY17. So far, with the exception of Tamil Nadu and Kerala, all other 27 states and seven Union Territories have rolled out the food security Act, which aims at providing highly subsidised foodgrain to around 82 crore population as monthly entitlement.

As per the Act, states were given a year’s time to roll out the mega food security law after its passage in September 2013. However, majority of the states could not implement the Act within this time frame due to the time taken in identifying beneficiaries and developing the infrastructure. While the prices specified in NFSA are to expire next month, the government has decided to extend these till the end of the fiscal year.

An official said Section 37 of NFSA empowers the Central government to amend the schedule. The first schedule grants the Centre the right to fix prices of grains to be supplied to beneficiaries after a passage of three years which should not exceed the minimum support price (MSP) offered to farmers for the respective commodities.

“Since there was delay in implementation of the food security Act, we have communicated to the states to continue with the current price at which grains is supplied from the Centre till end of the current financial year,” an official said.

The food ministry would shortly notify the rate and submit it in Parliament as per the norm.

However, sources said, with rising burden of food subsidy which is budgeted at R1.34 lakh crore in the current fiscal, there was debate in the government machinery to increase the price of grains to be supplied under the food security Act. Especially the economic cost (including MSP, storage and transportation) calculated by Food Corporation of India (FCI) for rice and wheat is R3,266 per quintal and R2,344 per quintal, respectively.

However, keeping in mind the sensitiveness of the issue, especially when Uttar Pradesh and Gujarat would be witnessing state elections, the government did not take the decision to hike the prices of foodgrain supplied under NFSA.

The Financial Express, 10 August, 2016, http://www.financialexpress.com/economy/food-security-subsidy-to-be-extended-pds-to-get-cheap-grain-till-fiscal-end/342897/


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