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Plan panel against PDS for all, to propose differential pricing by Nistula Hebbar


To avoid a big burden on the exchequer from the proposed food security law, the Planning Commission will propose some key changes to the plan, including a virtual abandonment of the concept of universal public distribution system (PDS) endorsed by the Sonia Gandhi-led National Advisory Council (NAC). Commission deputy chairman Montek Singh Ahluwalia in a presentation to Gandhi later this week would suggest that under the proposed scheme, grain be sold to the above-poverty-line (APL) families at a much higher price than what BPL families are required to pay for the same.

Estimating that the cost to the exchequer of the food security programme would be a whopping Rs 1.9 lakh crore a year (as against the current food subsidy bill of a little over Rs 80,000 crore), the plan panel is likely to ask for per capita allotment of grain (Rs 6 kg) as against the NAC’s idea of providing 35 kg of grain for each entitled family.

Per capita allotment of grain at this rate is expected to reduce the cost of the food security bill significantly. Sources, however, refused to reveal the exact quantum of reduction.

The NAC draft on the Food Security Bill had raised alarm in the government and Ahluwalia was asked to provide a reality check to the council. “The universalisation of PDS and the change in the

nature of food security from just food to nutrition security will lead to an inflation of the food subsidy bill to unsustainable levels,” said a source.

Ahluwalia’s note, sources confirmed, would highlight what’s feasible on this front. “The note also advances a powerful argument to route food subsidy through a smart card, so that leakages can be plugged as each transaction can be electronically traced. One more advantage of a direct cash subsidy through smart cards would be that if card-holders have enough grain, they can access other items like sugar, kerosene, salt etc through fair price shops, and even shopkeepers will be incentivised to stock these items,” said the source.

The PDS system is currently in a shambles in many states. Apart from the poor allocation and infrastructure bottlenecks, experts have also questioned the rationale of focusing on grain allocation rather than addressing the more pertinent issue of nutritional deficiency.

Ahluwalia, of course, may have a battle on his hands with members of the NAC having been quite public about what they consider a fair deal on the Bill. The appeal would, therefore, be to NAC chairperson Sonia Gandhi’s discretion in the matter. “Some of the suggestions by the NAC are just unfeasible like the universalisation of PDS. This will have to be backed up by huge procurement drives, sucking all grain out of the open market as well,” said the source.

The fate of the Bill, therefore hangs in balance.