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NAC’s food security bill might get govt. nod

23 May 2011 Evaluate

The recommendations made by Sonia Gandhi led National Advisory Council on the proposed Food Security Bill is likely to be accepted by the government, in spite of some concerns that the suggestions would add to subsidy burden, increase dependence on import and may imbalance the country’s food economy. The move followed a meeting last week between Gandhi and Minister of State for Consumer Affairs, Food and Public Distribution, KV Thomas. The council had proposed legal subsidized food entitlement for at least 72% of the country’s population in phase I by 2011-12. The National Advisory Council had also proposed legal subsidized food entitlements for 75% of the country’s population, covering the priority (below the poverty line) and general (above the poverty line) households, in phase II by 2013-14.

The food ministry has set out plans in line with the NAC’s proposal to widen the scope of the legislation, which seeks to provide legal guarantee of subsidised grains to the poor, however many experts have warned that the NAC advices would force the government significantly to raise its grain procurement, which in turn would show the way to a larger subsidy load on its already strained finances.

In tandem with experts view, an expert panel headed by the C Rangarajan, PM’s Economic Advisory Council chairman said, 'It will not be possible to implement the NAC recommended food entitlements for either of the phases'. The panel had alternative suggested covering just 46% of the rural and 28% of the urban population roughly corresponding with the poverty estimates.

The Rangarajan panel’s views were strongly criticized by the NAC, which released a part of the draft food security bill for public debate a week after the panel submitted its report. The NAC is opposed to leaving out Above Poverty Line beneficiaries from the ambit of the food law. 

The PM formed an Empowered group of Ministers to settle varying views of the NAC and panel on the proposed legislation and even enlisted the planning commission’s support. Now the government may offer a compromise by implementing largely the NAC recommendations law, but the prices would be higher than the suggested in order to reduce the burden of subsides.

Presently, the government gives 35 kg of grains a month to each of the 65.2 million families living below the poverty line through the Public Distribution System (PDS). The government charges only Rs. 4.16 a kg for wheat and Rs. 6.65 a kg for rice from these families, while the NAC has proposed wheat at Rs 2 kg and rice at Rs 3 kg in food security law.

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