Lok Sabha Question No. 3597 (UNSTARRED), answered on 2015-08-11
Subject: Subsidy on Food
Ministry: CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION
Asked by: B. S. YEDDYURAPPA

## GOVERNMENT OF INDIA

## MINISTRY OF CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION

## DEPARTMENT OF FOOD AND PUBLIC DISTRIBUTION

## LOK SABHA UNSTARRED QUESTION NO. 3597

## TO BE ANSWERED ON 11 TH  AUGUST, 2015

## SUBSIDY ON FOOD

## 3597. SHRI B.S. YEDIYURAPPA:

Will  the  Minister  of  CONSUMER  AFFAIRS,  FOOD  AND  PUBLIC

DISTRIBUTION miHkksDrk ekeys] [kk| vkSj lkoZtfud forj.k ea=h be pleased to state:

- (a) whether any study has been conducted recently regarding providing
- allocation and disbursement of subsidies to the States;
- (b) if so, the details and the outcome thereof; and
- (c) the amount of food subsidy likely to be provided to the States during the current and ensuing year, State-wise?

## A N S W E R MINISTER OF CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION (SHRI RAM  VILAS PASWAN)

- (a)&(b) No Madam. No specific study has been conducted recently on the issue of allocation and disbursement of subsidies to the States. However, the High Level Committee (HLC) constituted under the Chairpersonship of Shri Shanta Kumar, M.P. on the issue of restructuring of Food Corporation of India (FCI), has made some recommendations, which have a bearing on the allocation and disbursement of food subsidy to the States. The details of  such  major  recommendations  of  HLC  and  decision  taken  by  the

Government thereon is at Annex-I.

- (c) In this regard, it is submitted that under Targeted Public Distribution System (TPDS), National Food Security (NFSA) Scheme and Other Welfare Scheme (OWS), foodgrains at subsidized rates are allocated to States/Union  Territories  by  Government  of  India  and  released  to  States through  Food  Corporation  of  India  (FCI).  The  Food  Subsidy  against  the foodgrains lifted by the State Government from FCI is provided to the FCI directly and not to the State Government.

However, in case of those States which have adopted Decentralised Procurement Scheme (DCP), food subsidy is directly released to the State Government  for  the  quantity  of  food  grains  distributed  by  them.  Since release  of  subsidy  depends  upon  allocation  and  actual  offtake  of  food grains, it is not possible to give any estimate regarding likely release of subsidy in ensuing year. However, a statement indicating the amount of Food  Subsidy  likely  to  be  released  to  FCI  and  DCP  States  during  the financial year 2015-16 is at Annex-II.

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ANNEXURE  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  &  (b)  OF  THE UNSTARRED QUESTION  NO.  3597  DUE  FOR  ANSWER  ON  11.08.2015  IN THE LOK SABHA

Decisions taken by the Government with regard to Recommendations of High Level Committee (HLC) having impact on Allocation and Disbursement of food subsidy to the States

HLC  has  recommended  to  have  a  relook  at  the  current coverage of 67 per cent of population; priority  households  getting only  5  kgs/person  as  allocation;  and  central  issue  prices  being frozen  for  three  years  at  Rs.3/2/1/kg  for  rice/wheat/coarse  cereals respectively. HLC's examination of these issue reveals that 67 per cent coverage of population is on much higher side, and should be brought down to around 40 per cent, which will comfortably cover BPL families  and  some  even  above  that;  5  kg  grain  per  person  to priority  households  is  actually  making  BPL  households  worse  off, who  used  to  get  7  kg/person  under  the  TPDS.  On  central  issue prices, HLC has recommended that while Antyodaya households can be given grains at Rs.3/2/1 per kg for the time being, but pricing for priority households must be linked to MSP, say 50 per cent of MSP.

Government has examined these recommendations and decided not to  implement  them  as  there  is  no  proposal  at  present  to  make amendments in the National Food Security Act, 2013.

2. HLC  has recommended  for  gradual introduction of cash transfers  in  Public  Distribution  System  (PDS),  starting  with  large cities  with  more  than  one  million  population;  extending  it  to  grain surplus  states,  and  then  giving  option  to  deficit  states  to  opt  for cash or physical grain distribution.

Government  has  decided  to  implement  this  recommendation with  an  appropriate  strategy  to  maintain  a  balance  between  the cash transfer of subsidy and availability of foodgrains in the market. Further,  Government  has  decided  to  implement  it  only  in  those States/UTs, which are agreed to and ready for it.

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ANNEX-II ANNEXURE REFERRED TO IN REPLY TO PART  (c)  OF  THE  UNSTARRED QUESTION  NO.  3597  DUE  FOR  ANSWER  ON  11.08.2015  IN  THE  LOK

SABHA

## Subsidy estimated to be released to DCP States and FCI during the financial year 2015-16

(Rupees in crores)

|   Sl. No. | Name of the State/ FCI   |   Subsidy likely to be released as per Budget Estimates of 2015-16 |
|-----------|--------------------------|--------------------------------------------------------------------|
|         1 | FCI                      |                                                              97000 |
|         2 | Bihar                    |                                                               1830 |
|         3 | Punjab                   |                                                                100 |
|         4 | Madhya Pradesh           |                                                               5900 |
|         5 | Andhra Pradesh           |                                                               1000 |
|         6 | Telangana                |                                                               1350 |
|         7 | West Bengal              |                                                               2900 |
|         8 | Chhattisgarh             |                                                               3550 |
|         9 | Uttarakhand              |                                                                410 |
|        10 | Tamil Nadu               |                                                                910 |
|        11 | Odisha                   |                                                               3900 |
|        12 | Karnataka                |                                                                160 |
|        13 | Gujarat                  |                                                                 50 |
|        14 | Kerala                   |                                                                759 |
|        15 | Rajasthan                |                                                                100 |

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