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Food subsidy bill may not go up much: Thomas by Sandip Das

The 2012-13 Budget may not have to provide as big a jump in the food subsidy bill as expected earlier. This is because of a series of measures initiated by the government to cut wastage and improve efficiency, food minister KV Thomas has said.

The measures that would bring down the need for funds include the Targeted Public Distribution System (TPDS) and the setting up of modern grain storage facilities, which have helped increase supply chain efficiencies.

“Through the modernisation drive of TPDS, we would soon bring down the number of people with BPL cards to 17 crore from the existing 20 crore,” Thomas told FE.

Last week, in a pre-Budget meeting with finance minister Pranab Mukherjee, Thomas had conveyed the measures being taken by the food ministry to reduce wastage and pilferage.

Thomas said the food subsidy bill for the current year is estimated to be R63,000 crore.

In Budget 2011-12, the government had estimated the bill to be around R60,000 crore.

“Even if we allocate grain under the new poverty estimate and BPL survey (being undertaken), the food subsidy would go up to R80,000 crore only,” said Thomas. He said following the implementation of the National Food Security Bill, 2011, “the government would need only an extra R10,000 crore for running the mega scheme”. The Food Corporation of India has reduced grain losses to 0.01% from 2.5% through streamlining and modernisation of storage facilities in last four years, he said. Meanwhile, the food ministry has called a meeting of state agriculture and food ministers on February 8-9 in Delhi for speeding up the TPDS modernisation plan.

Thomas said the food Bill, which is currently with the parliamentary standing committee, would passed in the forthcoming season of Parliament.

At present, the government supplies 35 kg rice and wheat each every month at subsidised rates to 6. 52 crore BPL families.Wheat is supplied at R4.15 a kg and rice at R5.65 a kg to these families. The food subsidy Bill stipulates that 75% of the rural households will get subsidised grain under the law, at least 46% households would be considered as ‘priority’ category, and each person in these households will get 7 kg grain a month at subsidised price of R2 per kg for rice, R3 for wheat and R1 for coarse grain.