Revision of scale and price of PDS foodgrains:implementation postponed
The Central Government, with a view to ensuring that the foodgrains under the Public Distribution System reach the poor households, has been taking various measures. The allocation to the States prior to April 2000 was based on an entitlement of 10 kgs. per family per month. The food subsidy during 1999-2000 was of the order of Rs. 9200 crore. The CIP of foodgrains was revised in July 2000 at Rs. 5.65 per kg for rice and Rs. 4.15 per kg. for wheat for BPL households. The prices for APL households were fixed at the level of economic cost, i.e., Rs. 11.30 per kg. for rice and Rs. 8.30 per kg. of wheat. In December 2000, the Government launched the Antyodaya Anna Yojana (AAY) for 1 crore poorest of poor households, the CIP prices for whom were fixed at Rs. 3 per kg. or rice and Rs. 2 per kg. of wheat.
As a measure to liquidate the excess stocks of foodgrains in the Central Pool, the allocation to States for BPL households was increased to 20 kg. per family per month in April 2000 and further to 25 kg. per family per month in July 2001. As stocks had continued to accumulate, as a further measure to liquidate the surplus stocks of foodgrains, the Government had increased the allocation to States for all categories of consumers (APL, BPL and AAY) uniformly to 35 kg. per family per month in April 2002. The TPDS offtake went up from 203 lakh tonnes in 2002-03 to 241 lakh tonnes in 2003-04 and further to 295 lakh tonnes in 2004-05. During the current year, the TPDS offtake is likely to increase beyond 320 lakh tonnes.
In addition to TPDS, the Government of India is also implementing other foodgrains-based welfare schemes, such as the Sampoorna Gramin Rozgar Yojana (SGRY), the Mid-day Meal Scheme and the National Food for Work Programme (NFFWP). The offtake of foodgrains under these schemes has also registered a sharp increase.
In view of the above measures, the stocks of foodgrains in the Central Pool, which had peaked, inter alia, to 648 lakh tonnes in June 2002, fell to 151 lakh tonnes in October 2005, comprising 48.5 lakh tonnes of rice and 102.9 lakh tonnes of wheat against the minimum buffer norm of 162 lakh tonnes for October, comprising 52 lakh tonnes of rice and 110 lakh tonnes of wheat. The wheat stocks have further gone down to around 62 lakh tonnes as on 1st January 2006 and are projected to be around 15 lakh tonnes on 1st April 2006 against the minimum buffer norm of 40 lakh tonnes for April. Fortunately,
rice procurement has been good this year and the position of rice on 1st April 2006 is likely to be above the minimum buffer norm of 122 lakh tonnes for April.
The food subsidy had increased from Rs. 9200 crore in 1999-2000 to Rs. 26,000 crore in the current year and if the CIPs are not revised upward and the scale of issue are not revised downward, the food subsidy may go up further due to increased MSP & other procurement incidentals.
Our projections for 2006-07 indicate that even if levels of procurement of wheat and rice remain high, it is being increasingly difficult to meet the full requirements of foodgrains under the TPDS and other welfare schemes with the existing norms. At the existing norms and the issue prices, there have been studies indicating substantial diversion of foodgrains supplied under the TPDS as well as foodgrains based welfare schemes.
It was under these circumstances that the Government of India had taken the following decisions:-
For Above Poverty Line (APL) households, the allocation of foodgrains to State Governments to be fixed on the basis of 20 kg. per family per month from the earlier allocation of 35 kg. per family per month, or the offtake during 2004-05, whichever is lower.
For Below Poverty Line (BPL) and Antyodaya households, the allocation of foodgrains to States to be fixed on the basis of 30 kg. per family per month from the existing 35 kg. per family per month.
The APL Central Issue Prices (CIPs) of foodgrains, which were last fixed in July 2001, to be revised upwards by Rs. 85 per quintal and Rs. 95 per quintal for wheat & rice respectively.
The BPL CIPs, which were last fixed in July 2000, to be continued at the same level.
The Antyodaya Anna Yojana (AAY) CIPs at Rs. 2 per kg. and Rs. 3 per kg. for wheat & rice respectively to be continued without any change.
At the time of fixation of CIPs in July 2001, the element of subsidy was 50% in respect of BPL households and 70% in respect of APL households. The economic cost has since gone up to Rs. 13 per kg. in respect of rice & Rs. 10 per kg. in respect of wheat. Despite these increases, a conscious decision was taken to safeguard the interests of the poor by retaining the BPL & AAY CIPs at the existing rates. However, with a view to ensure that the food subsidy remains targeted towards poor households, APL CIPs was proposed to be increased upwards.
The impact of these decisions would have been marginal in most States. For APL households, the percentage offtake of foodgrains during the year 2004-05 was 14.4%. The fixation of the APL allocation at 20 kg. per family per month would still enable most States to lift foodgrains based on the 2004-05 offtake. Similarly in respect of BPL households, as the allocation has been brought down only by around 14% and the overall offtake was 81%, most States would have continued to get the allocation comparable to their offtake during 2004-05. As regards the AAY scheme, the allocation in 2004-05 had been based on 2 crore households. As the coverage of AAY households has increased to 2.5 crore during 2005-06, the allocation to States under AAY would, in fact, increase.
The number of BPL/AAY households covered under the TPDS allocation has been fixed at 6.52 crore based on the poverty ratio of 36% as assessed by the Planning Commission for 1993-94. Even though the Planning Commission has indicated that the poverty ratio has come down to 26%, the coverage of BPL/AAY households under TPDS has not been reduced. In fact, the coverage of Antyodaya households, which was only 1 crore at the time of launch of the scheme in December 2000, has since been progressively increased and now covers 2.5 crore households, and would continue to get foodgrains at Rs. 2 per kg. and Rs. 3 per kg. for wheat & rice respectively.
Some State Governments have represented that the decisions would adversely affect the working of the TPDS in their States. Several public representatives have also sought a review of the decisions. Keeping in view the representations and public sentiments, it has been decided to postpone the implementation of these decisions for some time.
SBK:CP:PDS10.1.2006
(Release ID :14874)