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NAC to consult ministries on Food Security Act

The National Advisory Council is still working on the amount of grain to be distributed to each family under the Food Security Act. It will hold consultations with ministries of rural development and food and the Planning Commission before it firms up its suggestions for the proposed legislation.

The panel, which met on Monday, considered the economic cost of various options to meet the goal of food security. The NAC will be meeting next on September 24.

The panel has been considering options to reconcile the government’s proposal to give 25 kg of grain and its plan to increase the quantum to 35 kg. NAC’s sub-committee on Food Security Act (FSA) has split the beneficiary population into rural and urban. It has worked on two options to determine entitlement for the rural population. For the urban population, NAC has suggested no differentiation.

The first, ‘near universalisation’ model, would entail providing 35 kg of grain at Rs 3 per kg to all rural households, excluding except the top 20% of the eligible group. The second option, ‘universal with differential entitlements,’ divides the eligible group into above poverty line and below poverty line. This would mean that 42% of rural households would receive 35 kg grain every month at Rs 3 per kg and remaining rural households will get 25 kg grain at a price that would vary between Rs 5 to Rs 7.50 per kg.

When it comes to the urban population, there is only one approach. The target group, which is roughly 33% of the households, will be given 35 kg of grain every month at Rs 3 per kg. The focus beneficiaries will be homeless or slum residents, households in vulnerable occupations, and socially vulnerable households.

Taken together, the first option would impact 14.4 crore households. The advantage of this option of ‘near universalisation’ that no survey will be needed to determine BPL households. The target group can be determined by applying an exclusion criteria which would keep big landowners, traders and I-T payers outside the beneficiary list.

The uniform entitlement would make administration of the programme easier. However, this comes with a higher subsidy bill. At nearly Rs 91,000 crore, it would require an additional subsidy of Rs 35,000 crore. Besides a higher subsidy bill, there is concern that under this model there is the risk of misusing the exclusion criteria.

The second option could cost Rs 80,000 to Rs 85,000 crore, depending on the price which APL households pay. The additional subsidy would range between Rs 23,000 crore to Rs 29,000 crore. The total number of households covered under this option is 17.7 crore. The major disadvantage of this option is the need to rely on ‘problematic and discredited BPL survey’. Even its administration would be difficult as different households get different quantities and different rates. An advantage of this model is that no one is left out.

To determine the beneficiaries, NAC plans to rely on the survey being conducted by the rural development ministry rather than the Tendulkar Committee. The rural development ministry has just begun a pilot survey. “The rural development survey will determine who the poor are as against the Tendulkar Committee which enumerated the poor. Implementation of the proposed act requires that we identify the beneficiaries, therefore the reliance on the rural development ministry’s BPL survey,” a NAC member explained.

The panel proposes that the entitlement programme be rolled out in the first year in 150 districts and then extended to all over the next four years. Sources said that when the programme will be rolled out will depend on which model is finally decided on. The NAC has suggested that reform of PDS should include ensuring that panchayats and community institutions run their own PDS outlets, doorstep delivery to PDS outlets, decentralising procurement and storage. Each of these measures would help in reducing cheating.