Special Correspondent

Food subsidy this year will come down by Rs. 4,524 cr., says Pranab

NEW DELHI: The Government on Friday increased the issue price of foodgrains for both Above Poverty Line (APL) and Below Poverty Line (BPL) families, while simultaneously reducing their offtake quantity to 20 kg and 30 kg.. It is expected to provide a saving of over Rs. 4,500 crore in food subsidy.

In terms of the approval accorded by the Cabinet Committee on Economic Affairs, which met under the chairmanship of Prime Minister Manmohan Singh, the increased issue price for the APL will be 70 per cent of the economic cost and in the case of the BPL it will be 50 per cent.

Defence Minister Pranab Mukherjee said the food subsidy for the current year would come down by Rs. 4,524 crore.

For the Antodaya scheme for the BPL families there would be no change in the effective price but the quantum would be lowered to 30 kg per month from 35 kg hitherto, as in case of BPL families. The quantum of foodgrains for APL households has been reduced from the existing level of 35 kg per month to 20 kg.

The actual issue price of wheat for APL stands at Rs. 705 per quintal and for rice Rs. 915 a quintal. The economic cost of rice in 2000 was ruling at Rs. 1,130 and that of wheat at Rs 830 a quintal.

The decision results in an increase of 85 paise and 95 paise per kg for rice and wheat in the central issue prices in relation to supplies for APL households.

In case of BPL and Antyodaya households, the issue price would continue to be at the existing level. While to Antoyodaya households wheat and rice would be provided at the price of Rs. 2 and Rs. 3 per kg, the price of these commodities would be Rs. 4.15 (wheat) and Rs. 5.65 (rice) per kg as before for BPL households

He said the issue prices of wheat and rice were formulated in 2000 and there has been no revision since 2003 even as the procurement prices increased every year substantially. The CCEA has thus decided to revise the issue prices.