Subsidised food bill to cost Rs 1 lakh cr

Govt pushes ahead even as experts warn of a deeper financial crisis

According to the Union Ministry of Food and Consumer Affairs, the nodal implementing body for the proposed National Food Security Scheme (NFS), mere addition of a few features like separate legal entitlements to some vulnerable sections such as  pregnant women, lactating mothers, homeless, destitute and disaster-affected households would cost  the exchequer another Rs 12,000 crore per annum.

The government had estimated the scheme to cost around Rs 90,000 crore. But the addition of special sections would increase the fiscal burden to over Rs 1 lakh crore, sources in the government told Deccan Herald.

Initially, the Finance Ministry had shot down the Food Ministry’s proposal to include vulnerable sections but later relented on the advice of the National Advisory Council, the think tank led by Congress president Sonia Gandhi, the  sources added.

Apart from subsidised foodgrains to the poor, the draft bill circulated to the states provides for free meals for  pregnant and lactating mothers; one free meal a day for destitute persons; affordable meals for the homeless through community kitchens; and two free meals daily for every member of disaster-affected households for a period of three months.

Monetary benefit

The revised bill also provides for monetary benefit for every lactating mother up to six months after delivery and extension of the free midday meal scheme up to 10th standard.

Former governor of Reserve Bank of India, Y Venugopal Reddy, recently said that schemes such as MGNREGS, the flagship welfare initiative of the UPA government, were almost impossible to withdraw, exacerbating the fiscal situation.

The MGNREGS or rural employment guarantee scheme, on which the government spends over Rs 40,000 crore a year, has been criticised by many economists for its failure to create permanent assets.

India’s fiscal deficit is expected to increase to almost five per cent of national income in the year ending March 31, 2012, compared to the projected 4.6 per cent in this year's budget, due to slowing down of the economy and unbridled government spending.