The Centre will set up a Central Food Security Fund to monetarily compensate the Below Poverty Line (BPL) beneficiaries of the Targeted Public Distribution System (TPDS) who fail to get the proposed mandatory 25 kilograms of wheat or rice per family per month at a subsidised rate of Rs. 3 per kg.

The compensation would be at the economic cost of the foodgrains so that an entitled beneficiary can buy grains from the open market.

State governments who avail central government's allocation of foodgrains but fail to provide the mandatory grains to an entitled BPL family shall have to bear the cost of compensation. State would have to undertake PDS reforms to streamline the system so that grains reach the targeted beneficiaries.

This is indicated in the draft National Food Security Bill that will be considered by the Empowered Group of Ministers in its meeting here on Thursday. After EGoM's okay, the Bill would be taken up by the Union Cabinet for approval.

While there is no proposal in the Union Food Ministry's draft Bill to reduce the current allocation of 35 per kg for the BPL population, it is not decided yet whether the balance 10 kg would continue to be provided at the current subsidised rates or would be sold at a further reduced rate of Rs. 3 per kg. The subsidy for providing 25 kg wheat or rice to the current number of 6.52 crore BPL households at Rs 3 per kg would be over Rs 28,000 crore.

The government shall issue fresh guidelines for a nation-wide survey to identify BPL families. The parameters for the guidelines are being worked out by the Rural Development Ministry for rural areas and the Planning Commission for the urban areas. The poverty estimates too would have to be arrived at there differing findings.

At present 6.52 crore BPL families get 35 kg per family per month of subsidised wheat (Rs 4.10 per kg) and rice Rs. 5.65 per kg), of which two crore ``poorest of the poor'' beneficiaries get foodgrains at a flat rate of Rs 2 per kg under the Antyodaya Anna Yojna. Most likely, for political reasons, the AAY beneficiaries may continue to get their quota of grains at Rs 2 per kg.

Poverty estimates

The poverty estimates, however, would be re-worked as the current allocation for 36 per cent poor is based on 1993-94 population estimates. The Suresh Tendulkar committee report in its findings has put the poverty percentage at 37.2 per cent. However, the latest Planning Commission estimates, based on 2009 population, claims 27.5 per cent poor people in the country.

The Congress in its election manifesto in 2009 had promised 25 kg of Rs 3 per kg wheat or rice for BPL under the TPDS. This proposal was adopted by the Congress-led United Progressive Alliance government and approved by the Union Cabinet. Recently, President Pratibha Patil in her joint address to Parliament, reiterated the UPA intent to legislate a National Food Security Act on these lines.

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