Crores needed to keep foodgrains promise

Gargi Parsai

NEW DELHI: The Congress’ election promise of providing Rs. 3 a kg rice and wheat to the Below Poverty Line (BPL) population at a reduced scale of issue (25 kg a family against 35 kg per month) would reduce the food subsidy by about Rs. 4,000 crore but would still cost the exchequer crores of rupees in the next five years.

The Congress has promised to guarantee by law 25 kg of discounted foodgrains to all 6.52-crore BPL households. It is not quite clear, though, how the scheme would be implemented and whether a reduced scale of 25 kg would be universally acceptable.


“The Indian National Congress pledges that every family living below the poverty line (BPL) either in rural or urban area will be entitled, by law, to 25 kg of rice or wheat a month at Rs 3 per kg,” the party’s manifesto said.

However, if the 25 kg of discounted foodgrains to the BPL families at Rs. 3 a kg were guaranteed by law (Food Security Act), the government (if this is included in the United Progressive Alliance government’s Common Minimum Programme) would have to provide the foodgrains even if by importing or buying off the open market.

Silent on APL

The manifesto is silent on the Above Poverty Line (APL) people who are being allocated a minimum of 10 kg per month of foodgrains.

The current rate of the issue price for BPL foodgrains is Rs. 4.15 a kg for wheat and Rs. 5.65 a kg for rice.

The issue price of wheat for the APL population is Rs. 6.10 per kg and Rs. 8.30 a kg for rice.

The economic cost of wheat at the current minimum support price (of Rs. 1,080 a quintal) is Rs. 1,400 per quintal, while for rice it is Rs. 1,893 per quintal. As against this, the market price of wheat is around Rs. 14 a kg and around Rs. 20 per kg for rice.

The current poverty estimates are about 27.5 per cent of the population, but the Planning Commission was looking at these estimates and may come up with revised figures.

If that were to be so, then the Congress’ idea of providing subsidised foodgrains at a ‘lower’ scale — 25 kg per family — to ‘lesser’ families may turn out to be a clever electoral promise.

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