Our Bureau

New Delhi, Jan 10

THE Government has decided to put on hold the recent Cabinet decision to cut the food subsidy bill by 30 per cent, following protests from the Left parties, DMK and a section of the Congress. The Union Minister for Agriculture, Food and Public Distribution, Mr Sharad Pawar, stated this here today.

The annual reduction of Rs 4,524 crore in the food subsidy bill was to be achieved primarily by lowering the quantity of foodgrains for all segments sold under the Public Distribution System (PDS) and by increasing the price of foodgrains for the above poverty line (APL) segment. This decision was taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA) chaired by the Prime Minister, Dr Manmohan Singh, last Friday.

"I am not executing the decision on food subsidy cut. The entire decision has been stayed. I will discuss this issue with UPA people," Mr Pawar said, adding that the move was primarily targeted at above poverty line (APL) families.

No rollback:

The decision would be kept on hold pending discussions with all UPA (United Progressive Alliance) allies and supporting parties, he added. "I am going to explain the entire position behind the food subsidy cut to the Congress party, CPI (M) and CPI," he said on the sidelines of a function. He, however, ruled out a rollback of the decision.

"The same Cabinet Committee that had taken this decision earlier, decided to put it on hold," said a top official at the Ministry, adding that there was no time frame to bring the move back on track.


Following pressure from various political segments including the Left, DMK and a section of the Congress, the Congress on Monday had reportedly asked the UPA Government to reconsider its decision to increase the price of wheat and rice sold under the PDS.

States unaffected: Govt

The impact of these decisions would have been marginal in most States, said an official statement.

APL households bought only 14.4 per cent of the total foodgrains allotted during 2004-05 under PDS. APL allocation at 20 kg per family per month would still enable most States to lift foodgrains based on the 2004-05 offtake, it said.

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(This article was published in the Business Line print edition dated January 11, 2006)
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