Centre may pick up half the cost of transportation of targeted PDS grain

In the case of north-eastern and hilly States, Centre should bear 90% of the cost, says panel

KOCHI,18/09/2012.A worker packing wheat in a retail shop in kochi on Tuesday. The slow progress of the southwest monsoon is likely to hamper the production of both food and non-food crops and production of major crops. The production is projected to decline by 2.3% in 2012-13. Kharif cultivation has so far been sluggish and sowing has dipped by 5.9% y-o-y to 931.7 lakh hectares by August, according to Centre for Monitoring Indian Economy (CMIE) monthly review.Sowing of foodgrains has been the worst affected. Grains cultivation has been undertaken on 598.8 lakh hectares, lower y-o-y by 7.3%, CMIE said.Among the foodgrains, acreage of coarse cereals reported the steepest decline of 13% by August.Photo:K_K_Mustafah.

The Centre may share with the States 50 per cent of the costs for distribution of the foodgrains meant for the Targeted Public Distribution System (TPDS) under the recently passed National Food Security Act (NFSA).

An inter-State committee of secretaries chaired by Union Food Secretary Sudhir Kumar has recommended that the Central government pick up half the cost of transportation of grains from Food Corporation of India godowns to fair price shops. This will entail an estimated cost of Rs. 4,500 crore on the Centre, which will be in addition to the annual outgo of Rs.1,27,000 crore for the entire programme.

The panel has recommended that the cost sharing between the Centre and 13 north-eastern and hilly States should be in the ratio 90:10.

It has also suggested that a government/panchayat functionary be attached to each of the nearly 5 lakh ration shops to process complaints from ration card holders.

So far five States — Delhi, Rajasthan, Haryana, Himachal Pradesh and Karnataka — have rolled out the scheme. Several other States have sought time to identify beneficiaries, which must be in accordance with the Socio-Economic Caste Census.

Higher margin for ration shop owners

The cost-sharing issue was hanging fire since the Act was passed last September with the State governments demanding that the Centre pick up the entire cost of transportation. The costs, which include higher margin money for ration shop owners, have to be notified by the Centre as Rules.

The fair price shop owners have been demanding a raise in the commission they earn on the sale of every quintal of foodgrain under the NFSA. If the recommendation is cleared by the Union Finance Ministry, then ration shop owners will earn about Rs. 10,000 as against Rs. 2,000 to Rs. 5,000 per month.

The margin money has been raised to plug diversions of TPDS grains into the open market, well-informed sources said.

The panel was set up after a daylong meeting of State Food Ministers last October. Besides senior officials from the Food Ministries/Departments, the panel comprised the financial adviser and joint secretary in charge of NFSA in the Ministry of Food.

The NFSA seeks to provide 5 kilograms of subsidised rice or wheat or coarse cereals at Rs. 3, Rs. 2 and Re 1 per kg to identified beneficiaries capped at 67 per cent of the population.

Before the advent of the Aam Aadmi Party on the national scene, the food law was seen as a “game changer” by the UPA government. After the Delhi election, however, the focus has shifted to the anti-corruption Lokpal Bill.

Published - January 03, 2014 03:34 am IST