Policy

Upward revision in foodgrain prices after Parliament consent

Our Bureau New Delhi | Updated on December 22, 2011 Published on December 22, 2011

food security





The government has made a dramatic turnaround on the issue of the price at which subsidised foodgrains are to be made available to eligible families under the proposed Food Security Bill.

With the Congress Party supremo Sonia Gandhi pushing for the Bill, the Cabinet had hastily cleared the proposal, despite criticism from within the Government and misgivings over the huge burden this will place on the exchequer.

But the Bill, which was introduced in the Lok Sabha on Thursday, has seen a significant change in the wording of the clause which defines the price at which the grain is to be distributed.



The Government appears to have buckled under political pressure, and blocked off any possibility of a future increase in the subsidised price of the grain distributed under the Bill.

The Bill, which aims to cover 62.5 per cent of the population, has now fixed the ceiling price of the grain by changing the words to ‘not exceeding' from the earlier ‘not less than' used in Schedule 1.

The changed wording means that the price defined in the Bill will become law once it is passed, and any future upward revision in the price can be done only with the consent of Parliament.

The Government estimates that at the proposed coverage and entitlements, the economic cost for the year 2011-12 and the prices of food grains specified, the total annual expenditure on food subsidy under Targeted Public Distribution Scheme would be Rs 79,800 crore.



The Bill entitles every person belonging to priority households (below poverty line) to receive every month from the State Government, under the targeted public distribution system, 7 kg of food grain per person per month. It is said that 46 per cent of the all rural households and 28 per cent of all the urban households shall be designated as priority households. These families will get rice at a price “not exceeding” Rs 3/kg, wheat at a price “not exceeding” Rs 2/kg and coarse grains at a price not exceeding Re 1/kg.



It is said total of priority and general household will add up to 75 per cent of all the rural household and 50 per cent of urban households.



However, it has clarified that the estimate of the food subsidy is subject to change with changes in economic cost, central issue price of the food grains, number of beneficiaries covered and quantities of food grains allocated and lifted



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Published on December 22, 2011
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