Centre chokes on food bill

Centre chokes on food bill

Pawar objects, says subsidies too costly

Centre chokes on food bill

The proposed legislation seeks to legally entitle 75 per cent of rural households and 50 per cent of urban households to highly subsidised foodgrains. The Union Cabinet was expected to clear the Bill in its meeting on Tuesday.

“The discussion on the Food Bill remained inconclusive. We are trying our best to introduce the Bill in this session,” Food Minister K V Thomas told journalists here after the meeting of the Union Cabinet.

Prime Minister Manmohan Singh, who chaired the meeting of the Union Cabinet, decided to defer a decision on the Bill, as Agriculture Minister Sharad Pawar and several other senior ministers are understood to have expressed concern over the additional financial burden it would impose on the debt-ridden Government.

Some of the ministers argued that the Union Cabinet should tread carefully while taking a decision on the proposed legislation in order to avoid the embarrassment the Government had experienced on the issue of Foreign Direct Investment in retail sector recently.

The ruling Congress is keen to introduce the National Food Security Bill in the current winter session of Parliament, as it hopes that the proposed legislation would help it in an image makeover ahead of the next year’s Assembly polls in the key states.

But Pawar, who heads the Nationalist Congress Party (NCP), is understood to be among those who are opposed to the Bill’s provisions that seek to expand the coverage of the legal entitlement to subsidized foodgrain.

Pawar is of the view that the legal entitlement to subsidised and cheap foodgrains be restricted to the targeted beneficiaries in the poor and under-privileged sections of society and not generalised.

Trinamool Congress chief and West Bengal Chief Minister Mamata Banerjee is believed to have sought some more time to formulate her party’s views on the Bill.

Sources said that while most of the members of the Union Cabinet were not averse to giving certain sections of population legal entitlement to food, some of them were concerned over the fact that it would substantially raise the subsidy bill of the government, particularly at a time when the economy was slowing down and revenue inflows were not adequate.

A senior minister said that the proposed legislation could not be discussed in detail due to paucity of time, as the Union Cabinet had a number of items on its agenda on Tuesday. He said that the next meeting could be held on December 18 next.

Sources said that the Prime Minister decided to defer a decision on the Bill after some senior members of the Union Cabinet argued for a cautious approach to avoid a repeat of the fiasco over FDI in retail.

The Union Cabinet had on November 24 last decided to open the multi-brand retail sector for foreign investment.

Railway Minister Dinesh Trivedi, lone representative of the AITC, gave a note of dissent and several other ministers too expressed reservations. The Government had to finally put the decision on hold after strong protests by the opposition parties as well as some of the UPA constituents in Parliament.

The Congress promised the National Food Security Bill in its manifesto ahead of the Lok Sabha polls in 2009. The Bill is believed to be close to the heart of Congress president and United Progressive Alliance chairperson Sonia Gandhi.

Hit by a series of scams and crises over the past one-and-a-half-years, the Congress is relying on the NFSB to redeem its image ahead of the assembly polls in Punjab, Uttar Pradesh, Uttarakhand, Gujarat, Goa and Manipur.

The Government’s draft of the Bill seeks to cover up to 75 percent of the rural population and 50 percent of urban households with a proposed monthly entitlement of 7 kg food-grain per person, at Rs 3 per kg for rice, Rs 2 per kg for wheat and one rupee a kg for coarse grains.

The Government’s food subsidy bill is expected rise from the current Rs 82,000 crore to Rs 100,000 crore once the proposed legislation is passed.

Bill sans will

* Discussions inconclusive as Agriculture Minister Sharad Pawar objects to the high cost involved in implementing the food security bill

* Rise in fertiliser prices and the minimum support price for foodgrains could further add to the bill

* The bill proposes to give wheat at Rs 2 per kg to poor, while it would cost the government around Rs 17 per kg, raising the subsidy cost exponentially

* The government will try to bring the UPA partners on board on the bill drafted by the National Advisory Council headed by Sonia Gandhi