Food Security: Ranga Panel

Slash food security coverage: Ranga panel

Says Both Grain Availability & Subsidy Are Major Problem Areas

Our Bureau NEW DELHI

AGOVERNMENT-constituted expert committee has suggested a sharply toned down coverage of the national food security law than that recommended by the UPA chairperson Sonia Gandhi-led National Advisory Council, citing shortage of grain availability and subsidy concerns.
The panel has recommended assured delivery of wheat at Rs 2 per kg and rice at Rs 3 per kg only to poor.
"It will not be possible to implement NAC recommended food entitlements for either of the phases," the expert committee, said in its report made public on Thursday.
The NAC, headed by Congress President Sonia Gandhi, had recommended legal entitlement to subsidised food grains to both 'priority' and 'general' households, covering at least 72% population in phase-I starting 2011-12 and 75% in the Phase-II in 2013-14.
The NAC had estimated its proposal would require 55.59 million tonne of foodgrain in the final phase in 2014, which the committee said was an under estimation.
The committee pegged the requirement under the NAC proposal at 63.98 million tonne, rising to 73.98 million tonne taking into 8 million tonne for other schemes and buffer stock of 2 million tonne.
Against this, the committee said the government will be able to procure in 2011-12 and 2013-14 56.35 million tonnes and 57.61 million tonnes of foodgrain respectively, based on the current production and procurement trends.
"A larger procurement has danger of distorting the food prices in the open markets," the committee said.
It also bumped up the subsidy outgo under the NAC proposal from Rs 79931 crore in the final phase to Rs 92060 crore, and said yet more expenditure was needed on creating supply chain and warehousing facilities.
The large food grain procurement would also require higher minimum support prices and imports, which would increase the fiscal burden.
It, therefore, suggested legal entitlement for only 41% of the population, 46% of rural and 28 % of urban.
At present, the government provides 35 kg of food grains to 6.52 crore families below poverty line through ration shops. Wheat is provided at Rs 4.15 per kg and rice at Rs 5.65 per kg.
Following the report the government could move forward with the implementation. The Congress Party had promised to bring food law under which it would provide 25 kg of wheat or rice per month at Rs 3 per kg to the poor.
However, implementation of the recommendations, even in the current form, are expected substantially increase subsidy burden of the government especially with the state governments left in charge of the ground level implementation.
The government plans to reduce its fiscal deficit to 4.8% by 2011-12. It is targeting to bring it down to 3% of the GDP by 2015. With subsidies on oil and fertiliser and expenditure on social schemes continuing to go up any additional commitment on the part of the government are bound to make the task of fiscal consolidation tougher.
The committee has suggested long-term measures including increasing foodgrain production, create a stable procurement regime, comprehensive computerisation of PDS, introduction of smart cards for the beneficiaries and entrust identification of beneficiaries to the state governments.
The NAC had recommended legal entitlement to subsidised foodgrains to both 'priority' and 'general' households, covering at least 75% of the country's population.
The Prime Minister set up and expertcommitteeunderthechairmanship of C Rangarajan to examine the implications of the proposal of the National Advisory Council and ministry of rural development.