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LATEST NEWS UPDATES | States oppose funding formula mooted in food security bill by Sandip Das

States oppose funding formula mooted in food security bill by Sandip Das

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published Published on Nov 17, 2011   modified Modified on Nov 17, 2011

Several state governments have come out strongly against how the centre has planned the resource mobilisation for the national food security law, a key initiative of the UPA-II government. States including those ruled by the Congress party has complained to the Union food ministry that legal entitlements for subsidised grain to a large section of the population as envisaged in the Bill would put an enormous financial burden on them. The scheme could turn out to be unviable unless it is funded largely out of the Centre’s finances, the states said.

What has particularly annoyed the states including Kerala, West Bengal, Bihar and Rajasthan is the provision that the central government would decide on how the cost of food security is shared between itself and the states. These states also have serious reservations about the way the beneficiaries of the scheme are to be identified. The states are also unhappy over the provision that in case of lack of availability of grain, the states would compensate the target population with cash.

Terming that the central government has ‘unilaterally imposed a substantial financial burden on the state government’ Bihar’s chief minister Nitish Kumar in a letter to Union food minister KV Thomas observed: “it must be remembered that those states having a major incidence of poverty are the very states which are also facing an acute financial crunch.” Kumar has also said the centre lacked the ability to assess the financial burden on the state government, as the former is removed from ground realities in states like Bihar where large number of families live below the poverty line.

Kerala, ruled by Congress-led coalition government, also raised apprehensions about the likely financial burden on the state from the food security law. “The expenditure would make a serious dent on the state’s finances and can make the implementation of food security bill unviable,” T K Manoj Kumar, secretary, food, civil supplies and consumer affairs, Kerala has said. West Bengal has also endorsed the stand taken by Kerala government. “States have to incur some expenditure while large chunk of the financial burden would be born by the centre,” KV Thomas, union minister for food and consumer affairs, told FE. Thomas is slated to meet finance minister Pranab Mukherjee on Wednesday for discussion the financial implication of the proposed piece of legislation which seeks to provide legal entitlement to subsidised grain to 75% of the country’s rural population and 50% of urban centres.

Questioning the method used by the centre in determining the number of BPL families, Kerala government communication notes “the identification of the population below the poverty line in Kerala, is being done currently and has led to the exclusion of a significant number of people. While number of BPL families in Kerala is fixed at 15 lakh, the estimate drawn up through local self government is pegged at 32 lakh families.

“For the lack proper assessment of number of poor families by central government, there will be problems in implementation of Food Security Act. The responsibility of meeting expenses of providing food security to poor and needy families above the prescribed numbers will shift to state government,” Chhattisgarh’s food and civil supplies department said.

According to the food bill, 75% of the rural households will get subsidised grain under the epochal law. Of these, 46% households would be considered as ‘priority’ category, and each person in these households will get the 7 kg of grain a month at subsidised prices— R2 per kg for rice, R3 for wheat and R1 for coarse grain. In case of urban centres, out of the 50% of the total households to be covered under the scheme, 28% would get ‘priority’ status.


The Financial Express, 16 November, 2011, http://www.financialexpress.com/news/states-oppose-funding-formula-mooted-in-food-security-bill/876414/0


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