The Hindu Business Line : CCEA cuts PDS foodgrains quantity, hikes issue price

THE Cabinet Committee on Economic Affairs (CCEA) today deferred a decision on disinvestments in National Mineral Development Corporation (NMDC) and the Neyveli Lignite Corporation Ltd, indicating that it had taken note of the opposition of the Leftist allies to such moves.

The Left parties, after a meeting on January 2, had announced they would oppose the disinvestment of small stake in non-navratna profit-making public sector enterprises and have decided to raise the issue at the next UPA-Left coordination committee meet.

Unless the Government is able to convince the Left allies to accept the disinvestment process, accruals into the National Investment Fund are not likely to be of any significant amount this fiscal.

Interest earnings from the fund are supposed to help the Government implement some of its social welfare programmes.

The Government's efforts to shore up the NIF seem to have run into difficulty at other levels too. The Ministry of Chemicals and Fertilisers, for instance, is understood to have given its conditional consent to the Finance Ministry for disinvestment of some fertiliser companies.

The Finance Ministry had sought the opinion of the Department of Fertilisers on disinvestment in National Fertilisers Ltd (NFL) and Rashtriya Chemicals and Fertilisers Ltd (RCFL). The Department of Fertilisers has said that it agreed with the proposal to sell 5-15 per cent stake in NFL and RCFL, subject to the condition that the proceeds be ploughed back into the respective companies.

Earlier, the Ministry of Mines had laid down similar conditions for disinvestment in Nalco, saying the proceeds should go back to the company.

Foodgrain prices: The CCEA meeting decided to reduce the quantity of foodgrains to above poverty line (APL) households to 20 kg per month from the existing level of 35 kg per month.

The Central Issue Price of foodgrains for APL households, which was last fixed in July 2001, has also been revised marginally upwards by Rs 0.85 and Rs 0.95 per kg for rice and wheat, respectively. This revision is expected to result in food subsidy savings of Rs 4,524 crore annually. The Government has decided to continue with the prices at the existing level of Rs 2 per kg and Rs 3 kg for wheat and rice in respect of Antyodaya households and Rs 4.15 per kg and Rs 5.65 per kg for wheat and rice in respect of below poverty line households. The issue prices have remained unchanged since July 2000. The scale of issue for BPL and Antyodaya households has been fixed at 30 kg per month.

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