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There should be political will to booty this step, which would abate the subsidy bill and the ambit for leakages

The Bread-and-butter Survey, tabled in Parliament in January, accurately flagged the affair of a growing aliment subsidy bill, which, in the words of the government, “is acceptable unmanageably large”.

The acumen is not far to seek. Aliment subsidy, accompanying with the drawal of aliment grains by States from the axial basin beneath assorted schemes, has been on a abiding advance trajectory. During 2016-17 to 2019-20, the subsidy amount, clubbed with loans taken by the Aliment Corporation of India (FCI) beneath the National Small Savings Fund (NSSF) appear aliment subsidy, was in the ambit of ₹1.65-lakh crore to ₹2.2-lakh crore. In future, the anniversary subsidy bill of the Centre is accepted to be about ₹2.5-lakh crore.

During the three years, the abundance of aliment grains fatigued by States (annually) hovered about 60 actor tonnes to 66 actor tonnes. Compared to the allocation, the bulk of drawal was 91% to 95%. As the National Aliment Aegis Act (NFSA), which came into force in July 2013, added entitlements (covering two-thirds of the country’s population), this artlessly pushed up the States’ drawal. Based on an bigger adaptation of the targeted Public Administration Adjustment (PDS), the law requires the authorities to accommodate to anniversary almsman 5 kg of rice or aureate per month.

For this banking year (2020-21) which is an amazing year on annual of the COVID-19 pandemic, the revised appraisal of the subsidy has been put at about ₹4.23-lakh crore, excluding the added bread-and-butter ability allocation of ₹84,636 crore. Till December 2020, the Centre set afar 94.35 actor tonnes to the States beneath altered schemes including the NFSA and added allocation, meant for administration amid the poor chargeless of cost.

Importantly, the government has absitively to carelessness the convenance of added bread-and-butter ability allocation and accommodate in the aliment subsidy bulk itself, arrears in loans outstanding of the FCI fatigued through the NSSF. Alike in the amount of revised estimates for 2020-21, the arrears aggregate a portion.

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It is adjoin this accomplishments that the Survey has hinted at an access in the Axial Affair Amount (CIP), which has remained at ₹2 per kg for aureate and ₹3 per kg for rice for years, admitting the NFSA, alike in 2013, envisaged a amount afterlight afterwards three years.

What makes the accountable added circuitous is the aberration in the retail affair prices of rice and wheat, from nil in States such as Karnataka and West Bengal for Priority Households (PHH) and Antyodaya Anna Yojana (AAY) allowance agenda holders, ₹1 in Odisha for both categories of beneficiaries to ₹3 and ₹2 in Bihar for the two categories, according to an official document. Needless to say, in Tamil Nadu, rice is accustomed chargeless of bulk for all categories; this includes non-PHH.

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The Centre, by advertence through the Survey that it is difficult to abate “the bread-and-butter bulk of aliment administration in appearance of ascent commitment” appear aliment security, does not appetite the NFSA norms to be disturbed. But, a bald access in the CIPs of rice and aureate afterwards a agnate acceleration in the affair prices by the State governments would alone access the accountability of States, which are alike contrarily addled beneath the botheration of a ability crunch. Political compulsions are perceived to be advancing in the way of the Centre and the States accretion the prices. The backroom of rice has been an basic affection of the political discourse. Promises by the Dravida Munnetra Kazhagam in the 1967 Assembly acclamation in Tamil Nadu — three measures (approximately 4.5 kg) at ₹1 — and the Telugu Desam Party during the 1983 poll in Andhra Pradesh — ₹ 2 per kg — captured the acuteness of the voter. One should appraise over the advantage of befitting so low the retail prices of aliment grains at fair amount shops, alike afterwards the access of about 50 years and accomplishing abundant abjection abridgement in the country. As per the Rangarajan group’s appraisal in 2014, the allotment of bodies active beneath the abjection band (BPL) in the 2011 citizenry was 29.5% (about 36 crore).

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In this context, it is time the Centre had a relook at the all-embracing aliment subsidy adjustment including the appraisement mechanism.

It should revisit NFSA norms and coverage. An official board in January 2015 alleged for abbreviating the breakthrough of advantage beneath the law, from the present 67% to about 40%. For all allowance cardholders cartoon aliment grains, a “give-up” option, as done in the case of affable gas cylinders, can be fabricated available. Alike admitting States accept been accustomed to anatomy belief for the identification of PHH cardholders, the Centre can nudge them into pruning the cardinal of such beneficiaries.

As for the prices, the absolute adjustment of collapsed ante should be replaced with a slab system. Barring the needy, added beneficiaries can be fabricated to pay a little added for a college breakthrough of aliment grains. The ante at which these beneficiaries accept to be answerable can be accustomed at by the Centre and the States through consultations. These measures, if appropriately implemented, can accept a comestible aftereffect on retail prices in the accessible market. There are no two opinions about reforms implemented in the PDS through assorted steps, including end-to-end computerisation of operations, digitisation of abstracts of allowance cardholders, agriculture of Aadhaar, and automation of fair amount shops.

Yet, aberration of aliment grains and added abiding problems do exist. It is nobody’s case that the PDS should be dismantled or in-kind accouterment of aliment subsidy be discontinued. Afterwards all, the Centre itself did not see any abundant advantage in the Direct Benefit Transfer (DBT) approach at the time of giving added aliment grains chargeless of bulk to the States during April-November aftermost year (as allotment of abatement measures during the pandemic). A revamped, need-based PDS is appropriate not aloof for acid bottomward the subsidy bill but additionally for abbreviation the ambit for leakages. Political will should not be begin wanting.

ramakrishnan.t@thehindu.co.in

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