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The bloating subsidy bill is making the Finance Minister, Mr Pranab Mukherjee, lose his sleep.
“When I think of the enormity of the subsidies to be provided, I lose my sleep. There is no doubt,” Mr Mukherjee told a conference of State Ministers on ‘Targeted Public Distribution and Storage'.
The overall subsidy bill on food, fuel and fertilisers is projected to exceed the Budget estimate by Rs 1 lakh crore. The Budget estimates for these three items have been pegged at Rs 1.34 lakh crore.
In this context, the challenge for the public distribution system (PDS) to deliver foodgrains to actual beneficiaries without leakages assumes significance. For this, a massive modernisation drive is required, Mr Mukherjee said.
Through an efficient PDS, a section of the society could be insulated from the adverse impact of inflation by supplying them essential commodities, he added. On the Food Security Bill, Mr Mukherjee said the Government has taken a ‘gigantic responsibility' of providing subsidised foodgrains to all citizens.
“We shall have to work out an implementable work programme for meeting the requirement of the people despite problems and constraints,” Mr Mukherjee said.
He also stressed on the need to adopt technology to boost farm productivity to meet the growing food requirement as arable land shrinks and water becomes scarce.
Further, Mr Mukherjee said the growing purchasing power both in rural and urban areas, led by an increase in average real wages, is resulting in increased demand for food. Despite all criticisms, the employment guarantee scheme MNREGA has created a benchmark in rural wages, which is irreversible, the Finance Minister added.
The Agriculture Minister, Mr Sharad Pawar, said the present structure of the PDS needs to be revamped and the States should take up the reforms before the Food Security Act is launched. He said inadequate returns or an assured guarantee from Government procurement agencies for purchase of foodgrains will dis-incentivise farmers from sowing such crops thereby affecting the food security.
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