India: Cabinet clears Food Security Bill; subsidy up by Rupees 276.63 billion

New Delhi, Dec 19 (PTI) Paving the way for subsidised foodgrains to poor, the Indian government has cleared the Food Security Bill that seeks to give legal entitlement of cheaper food to over 63 per cent of the population that will cost an additonal subsidy of Rupees 276.63 billion (about USD 5.5 bn). Under the Bill cleared at a special meeting of the Cabinet on Sunday, each person of the priority household, similar to Below Poverty Line families under the current Public Distribution System (PDS) of the country, would be supplied seven kg of rice, wheat and coarse grains per month at the rate of Rs 3, Rs 2 and Rs 1 per kg respectively (USD 0.06, 0.04 and 0.02). According to estimates, the implementation of this would result in higher food subsidy by Rs 276.63 billion taking the overall figure to about Rs 950 bn (USD 19 bn). The Bill, considered to be the pet project of the United Progressive Alliance chairperson Sonia Gandhi, was announced in the election manifesto of the Congress Party in the 2009 Parliament elections. Since September, 2009 the empowered Group of Ministers, headed by Finance Minister Pranab Mukherjee, has been deliberating on it. Agriculture Minister Sharad Pawar has been vocal about his criticism of the initiative due to financial burden and also about the avaialbility of foodgrains to meet the requirement under the proposed law. The government would require 61 million tonnes of foodgrains to provide food security as against 55 million tonnes required now under the PDS. Besides cheap foodgrains to the poor, the Bill also seeks to provide minimum three kg of foodgrains per month per person under the general household category at rate not exceeding 50 per cent of the Minimum Support Price. Miniumum support price is the rate at which government procures grains from farmers for it food stock which also ensures that there is no depressed sale of grains by farmers in case of a bumper crop. The government has also made a special provision for pregnant women and lactating mothers, children, destitutes, homeless and people under starvation among others. In rural India, up to 75 per cent of the people will be covered, with at least 46 per cent under priority households (which is same as below poverty line families in the existing public distribution system). Up to 50 per cent of people will be covered in the urban centres, with at least 28 per cent under priority category. Talking to reporters after the meeting, Food Minister K V Thomas said it has been decided to introduce the Bill in this session. "It was discussed and approved unanimously. Whatever, we had proposed has been approved," he said. Prices of subsidised foodgrains are much lower than the rate at which these are currently supplied to poor through ration shops. Under present PDS, 35 kgs of wheat and rice per month per family is supplied to 65.2 million BPL families at Rs 4.15 (USD 0.083) and Rs 5.65 (USD 0.113) per kg, respectively. General category would get at least 3 kg of grains at a rate not exceeding 50 per cent of the minimum support price. At present, about 115 million APL families get at least 15 kg of wheat and rice per month at Rs 6.10 (USD 0.122) and Rs 8.30 (USD 0.166) per kg, respectively. The objective of the proposed law is "to provide for food and nutritional security ... by ensuring access to adequate quantity of quality food at affordable prices, for people to live a life with dignity". PTI