Expert panel finds NAC proposal on food bill unfeasible

The committee, headed by PMEAC Chairman C Rangarajan, has instead suggested that legal entitlement could only be granted to the "priority households" which comprise just 46 per cent of rural and 28 per cent urban households. They back it up with the logic that the government does not have enough stocks to provide guaranteed foodgrains to "general households".

In the process nearly the same percentage of households would be left out from the purview of the legal guarantee for subsidised foodgrains if the Committee's suggestions are incorporated and enacted as the National Food Security Act.

The suggestions were firmed up in today's meeting attended by senior officials from food, agriculture, finance ministries and the Planning Commission.

"The committee said it is feasible to provide a legal entitlement to subsidised foodgrains only for "priority" category under the proposed law and "general" households would get foodgrains as per the availability," a senior government official said after the meeting, here.

The "general" households comprise 44 per cent in rural areas and 22 per cent in urban areas as suggested by the NAC. For legal entitlement to both the categories, it would require 65 million tonnes of wheat and rice, while the current procurement level stands around 55 million tonnes.

"To meet the requirement of only "priority" households, the government would need around 44-46 million tonnes, which the committee expressed can be met easily," the official said.

On prices, the committee favoured the NAC' proposal to provide 35 kg of foodgrains at a subsidised rate of Re 1/kg for millets, Rs 2/kg for wheat and Rs 3/kg for rice to the "priority" households "but subject to the condition that the prices should be reviewed annually and linked to the consumer price index (CPI)," the official noted.

For "general" households, the committee suggested that the prices should be linked to the minimum support price(MSP). Under the present Public Distribution System (PDS), the government provides 35 kg of foodgrains to 6.52 crore families under below poverty line (BPL) at Rs 3/kg rice and Rs 2/kg wheat per month.

The families living above poverty line (APL) get subsidised foodgrains as per the availability at Rs 8.30/kg rice and Rs 6.10/kg wheat per month. Currently, APL families get foodgrains between 15-35 kg per month.

The official said that the committee would prepare a final report and submit it to the Prime Minister in the first week of January.

The proposed Food Security Act was part of the Congress party manifesto for the last Lok Sabha elections in 2009, promising 25 kg of rice or wheat per month at Rs 3 per kg for every poor family with legal sanction.

An empowered group of ministries (EGOM) had then cleared the draft bill in March this year, on the same line as had been proposed in the Congress manifesto. But the NAC wanted its scope to expand to 35 kg per family.