The All India Anna Dravida Munnetra Kazhagam (AIADMK)'s proposal for providing 20 kg rice free to all households, if implemented, will entail additional expenditure of around Rs.375 crore a year to the exchequer.
The monthly subsidy being provided by the State government is Rs.184.26 crore. If the scheme of free rice is to be translated into action, the revised subsidy amount will be Rs.215.4 crore. This means an increase of Rs.31.14 crore a month.
At present, rice is supplied to about 1.85 crore cardholders at Re.1 a kg. A minimum of 12 kg is supplied monthly to every cardholder in general and for every additional adult person, four kg is given, subject to the maximum of 20 kg. Of the total cardholders who avail themselves of rice, over one crore card holders are in rural areas while the remaining 84 lakh card holders are in urban areas. Only in respect of Antyodaya Anna Yojana (AAY) cardholders, 35 kg rice is given at Re. 1 a kg and there are 18.64 lakh such cards. If the Dravida Munnetra Kazhagam's promise of providing 35 kg rice free to the AAY families is to be carried out, it will cost Rs.78 crore more to the exchequer every year.
The State is buying 21,000 tonnes every month when its requirement goes in excess of the quota of 2.96 lakh tonnes. It is getting this quantity through the Food Corporation of India's Open Market Sales Scheme (OMSS).
Sources, quoting the estimates of the Central Government, say that apart from the AAY card holders, there are nearly 48 lakh BPL families in the State. This means that the remaining – 1.12 crore – pertains to the APL category. According to the Central guidelines, the BPL families too should be given every month 35 kg rice each.
In the 2006 Assembly polls, the DMK had assured the electorate that it would provide rice at Rs.2 a kg to all card holders, as the issue price was Rs.3.50 a kg at that time. On returning to power, the party had immediately implemented the scheme of rice at Rs.2 a kg.
On the previous occasion too, the AIADMK, in response to the DMK's offer of rice at Rs.2 a kg, had come up with a proposal of 10 kg of free rice a month for all cardholders and another 10 kg at Rs.3.50 a kg. But, the AIADMK's counter proposal did not work.
Since 2005, rice off-take by the cardholders in the State has been witnessing a sharp rise. In 2010, the rice off-take was around 38 lakh tonnes. After the DMK Government reduced the issue price from Rs.2 to Re.1 a kg in September 2008 the off-take in 2009 rose to 37.9 lakh tonnes from 35.6 lakh tonnes the previous year.
The current total food subsidy bill comes to Rs.4,000 crore. In effect, the rice component comes to Rs.2,600 crore because of price variations when the State has to buy rice through the OMSS in excess of its quota. But, what the authorities are more concerned is the question of effective use of rice by end beneficiaries when given free.
It has been the position of Tamil Nadu that since the State is a major consumer of rice, the Centre should supply the commodity at Rs.5.65 per kg, which is meant for the BPL families.
Another issue that is bothering policy planners of the State is that as per the proposed norms mentioned in the draft National Food Security Bill, the Central assistance in the supply of rice will be given to States in the case of 90 per cent of rural cardholders and 50 per cent of urban people.
In the context of Tamil Nadu, around 50 lakh card holders will not be covered under the proposed scheme. If the State government is to provide rice to them at Re.1 a kg or free, it has to procure the commodity at least at a rate of Rs.15.5 per kg. The monthly requirement would be around 1.05 lakh tonnes, assuming that all such card holders are given 20 kg.
