Weeding out bogus ration cards hasn't helped govt

Food subsidy expected to go up by Rs 592 crore

Despite the State government’s claims of weeding out a large number of bogus ration cards and fake beneficiaries under various social security pension schemes, the total cost of food subsidy is expected to shoot up by a whopping Rs 592 crore in the coming financial year over the revised estimates of Rs 6,990 crore in the 2011-12 fiscal.

Chief Minister D V Sadananda Gowda has, in his 2012-13 annual financial statement, proudly declared that 40 lakh bogus ration cards, a majority of them BPL cards, and eight lakh fake beneficiaries under social security pension schemes had been eliminated.

This, however, does not translate into a cut in the government’s spending on subsidies. Instead, it has ballooned, indicating that the government would splurge on subsidies in the election year.

Power (irrigation pumpsets below 10 HP capacity, Bhagya Jyoti and Kutirajyoti connections), food, cooperation, transport, agriculture and social security pensions form major components of the estimated Rs 7,582-crore subsidy bill in 2012-13.

Power and food subsidies take the lion’s share with Rs 5,100 crore and Rs 900 crore, respectively. For social security pensions like old age pension and widow pensions, the government would be spending about Rs 500 crore.

The Food and Civil Supplies and the Revenue departments took bold decisions and identified and eliminated bogus beneficiaries. Efforts by the Energy department to regularise IP sets by offering a special scheme, however, flopped as there were no takers.

Previously, the State had an estimated 1.64 ration cards (1.07 crore BPL and 57 lakh APL) against 1.02 crore families, which meant there were 62 lakh bogus cards.
But the Planning Commission has estimated that the State should have only 32 lakh BPL families.

The Union government, therefore, provides rice that is adequate for only 32 lakh BPL families. The Centre provides rice at Rs 5.65 per kg to the State, which further subsidises it (Rs 2.65 per kg) for the benefit of BPL families.

The government provides 20 kg of rice at Rs 3 per kg every month to each BPL family. The government used to shoulder the burden of providing food grains to the remaining 75 lakh ‘so-called’ BPL families by spending taxpayers’ money.

For this, the government used to divert the entire quota of food grains received from the Centre for APL card holders to BPL families.

Under the APL quota, the Centre provides rice at Rs 8.30 per kg. The State further subsidises this price - Rs 5.30 per kg - for distribution among the so-called BPL card holders.

The elimination of 40 lakh ration cards, official sources said, should save at least about Rs 300 crore per annum for the government. Similarly, the Revenue department had undertaken a rigorous drive and weeded out eight lakh fake beneficiaries.

The move, officials said, should have brought down the subsidy cost by about Rs 280 crore. The department had officially declared that it will save huge sums for the government. But the savings do not reflect in the 2012-13 budget estimates for subsidies.

Minister’s defence
B A Harish Gowda, Secretary to the Food and Civil Supplies Department, however, said a bulk of the ration cards eliminated were APL cards. Moreover, the department has received 21 lakh new applications seeking ration cards. Hence, the food subsidy is estimated to go up in the coming fiscal.

Ballooning subsidies

Subsidy     2011-12 RE     2012-13 BE
Power    5156.00    5100.00
Food    810.00     900.00
Agriculture    223.84     353.13
Cooperation    266.81    276.65
Transport    239.38     274.60
Industries     51.05    62.22
Housing     26.69     67.94
Others    216.65     548.32
Note: RE: Revised estimate, BE: Budget estimate. All figures in Rs crores)