Centre not to reimburse states on midday meal LPG spending

States will now have to bear entire additional expenditure on procurement of LPG cylinders in market rate for cooking under midday meal scheme with the Centre deciding to stop reimbursing funds for it from this year.

A decision has been taken by the Finance Ministry in this regard. “It has been decided that additional expenditure to be incurred by the States or Union Territories for procurement of unsubsidised LPG cylinders will not be reimbursed to them with effect from April 1, 2015,” official sources told Deccan Herald.

The Human Resource Development (HRD) Ministry was so far sharing with the states 75 per cent of the additional expenditure incurred in the procurement of the LPG cylinders in market rate under the scheme since the Petroleum Ministry withdrew subsidy in September 2012.

In case of north-eastern states, the ministry shared 90 per cent of the additional expenditure on procurement of cooking gas. The Finance Ministry provided funds for it to ensure that implementation of the programme was not affected.

However, the recent decision of the Finance Ministry to stop funding for additional expenditure in procurement of LPG cylinders left the HRD Ministry helpless as the midday meal scheme saw a sharp cut (30 per cent) in its budgetary allocations this year.

The states will now have to bear the additional cost from their sources in procuring LPG cylinders under the midday meal scheme.

While the Centre had allocated Rs 13,216 crore for implementation of the scheme in 2014-15, it earmarked just Rs 9,000 crore for 2015-16, despite the cost of the implementation of the programme was to further increased due to various factors, including increase in cooking cost and also new enrolment of children in schools.

The ministry has recently revised the midday meal cooking cost by 5 per cent for 2015-16 over and above the cooking cost for 2014-15.

But it remains a question how such a meagre increase in cooking cost will help states and the Union territories in bearing the burden of huge additional expenditure to be incurred on procurement of cooking gas in market rate. The increased cooking cost will be shared between the Centre and state in the ratio of 75:25. The ministry will share 90 per cent of the cost in case of north-eastern states.