Govt to trim food subsidy

In a bid to prune its food subsidy bill, the Modi government has embarked on an initiative to rationalise the list of beneficiaries under various schemes that provide cheaper foodgrain to the needy sections of the society.

On target are the midday meal scheme of the HRD Ministry, the Integrated Child Development Scheme of the Ministry of Women and Child Development and some other welfare measures targeted at the elderly.

The government contends that the beneficiaries of these schemes are also covered under the National Food Security Law that seeks to provide cheaper foodgrain to 67 per cent of the country’s population.

“We want to differentiate the food subsidies from the expenditure on social welfare schemes. The expenditure on social schemes should not be seen as food subsidy,” a senior official said

A ministerial panel comprising Food Minister Ramvilas Paswan, Environment Minister Prakash Javadekar, Minister of State for Finance Jayant Sinha, Commerce Minister Nirmala Sitharaman is examining the issue.

The financial outgo over the National Food Security Law is to the tune of Rs 1.1 lakh crore every year. The government allocates 41.54 lakh tonne foodgrain for various social welfare schemes ranging from the midday meal scheme across government schools to the Annapurna Scheme targeted at the those over 65 years of age and not covered under the oldage pension initiative of the government.

In addition, allocations are also made to hostels meant for SC/ST students, the Integrated Child Development Scheme (ICDS) and non-government organisation for distribution amongst the poorest of the poor.

The midday meal scheme and the ICDS alone were allocated nearly Rs 32,000 crore in the general budget for 2014-25.

The Food Corporation of India, which allocates foodgrain for these schemes, has also been complaining of non-payment of dues by state governments. The Modi government has been focusing on rationalisation of subsidies and stabilisation of policies to attract investment and drive growth.

The government is expected to incorporate the suggestions of the Expenditure Finance Commission headed by former RBI Governor Bimal Jalan in the budget proposals.
Jalan is reported to have submitted interim recommendations to the Finance Ministry suggesting various steps to rationalise subsidies and public expenditure.