While there has been much despair over the government's “excessive” expenditure on food subsidy, the budget estimates and revised estimates over the last few years suggest to the contrary.
This year's budget pegs the food subsidy bill at Rs. 900 crore, which is down from Rs. 926 crore last year. Interestingly, the fine print of the budget shows that the revised estimates for 2011-12 — which reflects the actual amount spent over that financial year as opposed to the allocation — was only Rs. 810 crore. The amount spent on food subsidy in 2010-11 was Rs. 950 crore as the revised estimate for the year shows.
These statistics indicate a clear trend of decline over the years in allocation for food subsidy and money spent for it. It also shows a huge gap between actual spending and the budget estimate, which is a reflection of the optimism of revenue generation being belied.
Ambiguity
Interestingly, while the present budget — on the lines of the last budget — makes no mention of any new measures to make the burden of spiralling food prices lighter on the poor, it only speaks of “toning up administration of the public distribution system”. It says that a “detailed information technology-based exercise taken up by the government has resulted in cancellation of almost 40 lakh bogus or duplicate ration cards”.
While the food subsidy is dependent on the estimates of 8.4 per cent growth in the economy, the Fiscal Management Review Committee of the Government of Karnataka pegs the growth rate at less than 7 per cent. The review committee has recommended strict adherence to discipline by putting stringent measures on beneficiary-driven projects.
This assumes greater significance in the light of the huge gap between the cap on food subsidy by the Planning Commission at 32 lakh Below Poverty Line families in Karnataka and other estimates of poverty. For example, an expert committee, set up by the Rural Development Ministry, had said in 2009 that 50 per cent of Indians are BPL if one takes into account the criterion of calorie intake, as opposed to the Planning Commission's estimate of it being 28.3 per cent of the population.
