It is going to be a Herculean task for Tamil Nadu to sustain its model of universal public distribution system (PDS) if Parliament were to adopt the National Food Security Bill even with some amendments.
As reported by The Hindu on Tuesday, one of the amendments pertains to protecting the existing allocation of food grains to States. Apparently, no change has been proposed with regard to the rate at which food grains will be made available to States.
But, with Tamil Nadu adopting universal PDS, the State has to bear a huge cost for including “uncovered sections” of society within the scope of PDS once the new law comes into force. Currently, the State has 1.85 crore rice-drawing family cards. Generally, these card holders are entitled to get 20 kg rice free of cost.
As per a communication from the Union government, under the National Food Security Ordinance [which was promulgated early last month], approximately one half of the State’s population will be eligible to receive food grains at subsidised rates. In other words, out of a total population of 7.21 crore [as per the 2011 Census], about 2.33 crore in rural areas and 1.32 crore will be covered, representing 62.55 per cent of the rural population and 37.79 per cent of the urban population.
It is pertinent to point out here that nearly one half of the State’s population – close to 3.5 crore - lives in urban areas. Of them, almost two-thirds have been, straightaway, eliminated from the scope of the new legislation. Besides, one-third of the rural population has been rendered ineligible to have entitlements. The authorities in the State are yet to reconcile themselves to the reduction of proportion of coverage, even though the aim of the Ordinance/Bill is to cover 75 per cent of the rural population and 50 per cent of the urban population.
The question of huge cost looms large over them when it comes to providing rice to the “uncovered sections.” The State’s present quantity of allocation of rice – 2.96 lakh tonnes a month – has been broadly divided into three categories – Antyodaya Anna Yojana (AAY), Below Poverty Line (BPL) and Above Poverty Line (APL). [See table]. Even now, the State has to buy nearly 20,000 tonnes a month to meet its requirements fully
Under the new system, two of the three categories – BPL and APL – will cease to exist. More than this, what worries the officials is the rate at which the allocation for the biggest group – APL – will be made. There seems to be no clarity on this aspect, even after discussion with the Central authorities. This is why an assumption has been made that the quantity for the uncovered sections - which may come to one lakh tonnes a month - may have to be purchased at a rate of Rs. 25 per kg. It is on the basis of this assumption that Chief Minister Jayalalithaa has been saying that the State will have to spend Rs. 3,000 crore additionally every year for continuing with the universal PDS. Its annual food subsidy bill comes to Rs. 4,900 crore.
Another issue that bothers the officials is the availability of rice. They visualise a scenario of increased drawal of food grains by those States which stand to gain under the proposed system. In that case, rice may not be available with the Central authorities, irrespective of the rate.
If a major rice-consuming State such as Tamil Nadu enters the open market, seeking to procure rice in huge quantities, the price of the commodity naturally shoots up. Proponents of the legislation point out that the State may save at least Rs. 335 crore annually as rice will be supplied at Rs. 3 a kg and every adult will be entitled to five kg of food grains a month. [Now, rice meant for the BPL families is allotted by the Union government at 5.65 a kg and it is assumed that the present allotment for BPL is retained]. But this gain appears insignificant, considering the price that the State has to pay.
