Food subsidy bill under Centre's scanner

As expenditure on food subsidy clocked a 20 per cent increase, the Modi government appears to lean on the recommendations of the Shanta Kumar Committee to chart the future road map for food policy.

“The Food Subsidy Bill stands at Rs 1.07 lakh crore during 2014-15 (upto January 9, 2015), shows an increase of 20 per centover previous year,” states the Economic Survey tabled in Parliament by Finance Minister Arun Jaitley on Friday.

This is a substantial increase of 20.15 per cent over 2013-14 when an amount of Rs 89,740 crore was released as food subsidy. The survey has acknowledged that food subsidy has increased substantially in the past few years putting a severe strain on the public exchequer.

Pitching for rationalisation of various subsidies, the survey said the recommendations of the Shanta Kumar Committee provide “useful suggestions” for the future roadmap of food policy. The high-level committee chaired by senior BJP leader Shanta Kumar had recommended that the government have a “re-look” at the current coverage of 67 per cent of the population under the National Food Security Act.

The committee has also suggested deferring implementation of the NFSA in states that hve not implemented “end-to-end computerisation” in the Public Distribution System to curb leakages.

The survey said the focus of public expenditure for agriculture so far has been on provision of subsidies and it was time it shifted towards investments to boost productivity.

For 2014-15, the government has estimated a growth rate of 1.1 per cent for agriculture despite lower rainfall. Food grains output is estimated at Rs 257.07 million tonnes this year, down by 3 per cent from last year.