Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 150
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 151
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Warning (512): Unable to emit headers. Headers sent in file=/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php line=853 [CORE/src/Http/ResponseEmitter.php, line 48]
Warning (2): Cannot modify header information - headers already sent by (output started at /home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php:853) [CORE/src/Http/ResponseEmitter.php, line 148]
Warning (2): Cannot modify header information - headers already sent by (output started at /home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php:853) [CORE/src/Http/ResponseEmitter.php, line 181]
LATEST NEWS UPDATES | Food subsidy bill may touch Rs75,000 crore this year by Sreejiraj Eluvangal

Food subsidy bill may touch Rs75,000 crore this year by Sreejiraj Eluvangal

Share this article Share this article
published Published on Sep 6, 2010   modified Modified on Sep 6, 2010


Even as the prime minister protests his inability to distribute food free of cost to the poor, the overflowing food stocks seem set to lead to another year of blockbuster expenditure on the public distribution system.

According to numbers from the department of food and public distribution system (PDS), the government spent Rs25,600 crore on food subsidies during just the first four months of the year.

The amount — higher than the entire payout during 2006-07 — points to a full year subsidy payout substantially higher than last year’s Rs58,200 crore. The high levels of food stock — currently almost twice the norm — was alone costing the government an extra Rs27 crore per day in July and is estimated to result in an extra expenditure of Rs700-800 crore per year.

Government sources attributed the subsidy increase to a doubling of the purchase prices of wheat and rice in the last five years, even as the selling prices have remained stagnant.

“There has been no change in issue price for BPL or APL families in the last eight years,” said a Department official, pointing out that the majority of grain stock is sold at the above rates. Grain for various categories are sold to the state government at prices ranging from Rs2 per kg of wheat for the most backward sections to rice at Rs8.30 per kg for non-poor customers.

According to the ministry, the cost of acquisition, including storage and transportation costs, is Rs15.44 per kg for wheat while it is Rs20.43 for rice.

Department numbers also show that nearly 40% of the total food subsidies are going towards operational expenses such as godown-rentals, transportation and handling and storage. For example, out of the total expenditure of Rs58,200 crore on PDS subsidies, Rs11,700 crore was spent on ‘operating expenses’ by the Food Corporation of India, in charge of managing India’s PDS and buffer food stocks. It also spent another Rs8,400 crore on renting godowns to store grains after running out of owned capacity.

“The issue is primarily one of proper storage and proper distribution,” says Kavita Srivastava, general secretary of People’s Union for Civil Liberties, which approached the Supreme Court against PDS mismanagement a decade ago. Srivastava points out that the scheme suffers from both a leaky distribution mechanism, leading to large scale diversion, as well as poor procurement and storage policies.

“If the government cannot take care of the food, let them give it to the Panchayats,” she says. However, like the government, PUCL too supports continued subsidies for the above-poverty-line (APL) families, she added.

Against an in-house capacity of 15.5 million tonnes of storage with FCI, India currently has around 55 million tonnes of buffer stocks, forcing the firm to hire godowns from other companies such as the Central Warehousing Corporation (CWC) and state warehousing corporations.

Similarly, FCI spent around Rs5,200 crore last year for moving the grain from the collection centres to the final storage depots, sometimes in a different part of the country. “Procurement should be made from all over, not just from Punjab, Haryana and UP,” says Srivastava.


DNA, 7 September, 2010, http://www.dnaindia.com/money/report_food-subsidy-bill-may-touch-rs75000-crore-this-year_1434445


Related Articles

 

Write Comments

Your email address will not be published. Required fields are marked *

*

Video Archives

Archives

share on Facebook
Twitter
RSS
Feedback
Read Later

Contact Form

Please enter security code
      Close