The Centre will hold a consultation with State Food Ministers here on Tuesday to resolve their differences over cost-sharing in rolling out the targeted public distribution system (TPDS) under the National Food Security Act. The costs involve charges for handling of foodgrains, transportation, and intermediary storage in States, mandi taxes, value added taxes and enhanced commission to fair price shop owners per quintal of wheat or rice or coarse cereals.
So far, Delhi, Rajasthan and Uttarakhand have indicated their preparedness to roll out the TPDS under the new Act and that too in phases. The Union Food Ministry has accepted Haryana’s readiness and has allocated its share of foodgrains.
With the identification of eligible beneficiaries a crucial aspect, the Central government has asked the States to “clean up the database of beneficiaries” to ensure that the TPDS does not suffer from errors of inclusion of undeserving beneficiaries and exclusion of deserving ones. They have been asked to rely on the Socio-Economic Caste Census criterion and the State-wise percentage coverage indicated by the Planning Commission. The Antyodaya Anna Yojna beneficiaries will be included in the State’s percentage of total beneficiaries.
Some of the differences were discussed in a precursor meeting on Monday of Food Secretary Sudhir Kumar with Food and Public Distribution Secretaries of States and Union Territories. The agreed decisions will translate into the rules and guidelines that the Centre will adopt as indicated in various provisions of the Food Security Act. The Central government will pick up the annual food subsidy estimated at Rs. 1,25,000 crore that will accrue from selling rice at Rs. 2 per kg, wheat at Rs. 3 per kg or coarse grains at Rs. 1 per kg to 75 per cent of the rural and 50 per cent of the urban population.
The States want the Central government to bear the complete cost of handling and transportation of foodgrains from the Food Corporation of India godowns to the fair price shops. The States also want the Centre to bear the storage and carrying cost of foodgrains in case they are to maintain intermediary godowns. A capacity of about 204 lakh tonnes is being created in 19 States with Punjab, Haryana and Madhya Pradesh having taken the lead.
State Food Secretaries have urged the Centre to reimburse to them the mandi taxes (which are the highest in wheat producing States of Punjab and Haryana) and the Value Added Tax (VAT) wherever applicable. Earlier the States used to bear the costs but were mostly recovering them from the Public Distribution System beneficiaries. Now that the Centre has fixed the central issue price of foodgrains under the Food Security Act, the States cannot tinker with them.
The States have been asked not only to reform the TPDS but to also open new fair price shops to ensure that there is a fair spread of outlets.
In time, the States will have to go in for end-to-end computerisation of the TPDS with automation of fair price shops linked to Aadhar cards and the National Population Register. The Centre will share the costs for this on 90:10 basis with the north-eastern States and on 50:50 basis with others.
