Rs 33,000 crore outlay to ensure food security

NEW DELHI: The annual additional subsidy on account of the food security scheme is likely to increase from the estimated Rs 25,000 crore to around Rs 33,000 crore.

The spurt is on account of commissions to be paid to fair price shops along with transportation charges, and the additional outlay will have to be shared by both the Centre and states.

Overall, the food subsidy is pegged at around Rs 1.33 lakh crore, increasing the Centre's payout. The burden is likely to be a cause for concern for the government since the expanded outlay will have a cascading effect on the current account deficit (CAD).

Food ministry sources said state governments are yet to work out commission.

As of now, only three states - Delhi, Haryana and Uttarakhand — have launched the scheme based on the food security ordinance. "So far, we have no information of any other state launching the scheme immediately. The Act will come to force in the next 10 days with clear signs of all parties supporting the Bill, which will pave way for its passage in the Rajya Sabha," sources said.

However, advocating a strong case in favour of the scheme amid growing economic concerns, food minister K V Thomas had told the Rajya Sabha last week that when the food security scheme is implemented across the country the total pay out on account of subsidy would be around Rs 1.25 lakh crore.

He had said that the present subsidy on the ongoing public distribution system is to the tune of Rs 1.09 lakh, which is based on 2001 Census and 1992-93 poverty data. He had said that even if there is no food security scheme, the subsidy will be Rs 1.13 lakh crore in the current fiscal. "Now, when the Food Security Bill is implemented, which includes several schemes, like the mid-day meal programme and other initiatives for women and children, the subsidy will be about Rs 1.25 lakh crore. The government is confident that it can be managed," Thomas had said in response to a question.

As per government's estimate, the annual allotment of foodgrains to 35 states and Union Territories will be around 55 million tonnees with maximum of 9.6 million tonnes going to Uttar Pradesh, and Bihar ranks second at 5.5 million tonnes.