india

Updated: Feb 08, 2020 02:55 IST

A panel of Union government secretaries has recommended a review of the National Food Security Act (NFSA) to make it applicable only to “deserving sections”. The NFSA, which came into force in 2013 during the second term of the Congress-led United Progressive Alliance (UPA), offers subsidized foodgrains to 75% of the rural population and 50% of the urban population.

The NFSA covers nearly two-thirds of the total population at the all-India level. It caters to two categories of beneficiaries: Antodaya Anna Yojana (AAY) households and Priority Households. The scheme provides foodgrains of 5 kg per person in the Priority Households category and 35 kg per household to AAY beneficiaries at Rs 3 per kg of rice and Rs 2 per kg of wheat.

The so-called Sectoral Group of Secretaries on agriculture and rural development, one of the 10 panels set up by the Narendra Modi government to provide a roadmap for various ministries to follow over the next five years, called for a review of the NFSA in its final report, which was discussed and adopted on Thursday, an official said. The report will now be submitted to cabinet secretary Rajiv Gauba.

“This shows the class bias of the government. They are cutting tax rates for the rich and squeezing the subsidy for the poor. Due to low economic growth, the government’s tax revenue is falling short. So, to retain the fiscal gap, they want to compromise with welfare expenditure,” economist Prasenjit Bose said.

Before NFSA came into force as the country’s first guaranteed food scheme, the government provided subsidised food through the public distribution system for AAY, Below Poverty Line and Above Poverty Line population.

According to a background note prepared by government’s policy think tank, Niti Ayog, PDS beneficiaries numbered 25 million people under AAY, and 40.2 million and 115.2 million under the BPL and APL categories.

NFSA retained the AAY category, but subsumed the BPL and APL households to create a 161 million-strong Priority Households category. In the earlier PDS system, prices of food were different for the three different categories. But under NFSA, all covered households pay the same price for rice (~3 per kilo) and wheat (~2 per kilo), leading to a higher subsidy and larger beneficiary base.

Currently, about 805 million people are covered by the food security net and the total annual consumption comes to around 552.6 lakh tonnes of foodgrain annually, according to Niti Ayog. The estimated monthly subsidy implication is Rs 11,906 crore.

A senior official said the NFSA beneficiaries list can be trimmed or prices may be hiked for a section of the beneficiaries as India needs to rein in its rising food bill.

A section of the bureaucrats has argued that the NFSA played an important part in insulating poor from food price increases. “Even when the food inflation rose, India’s poor population could still remain untouched by spiralling prices as they are covered by the Food Security Act,” a senior official said.

The panel’s report also suggested that central schemes be linked to the states’ willingness to implement the model Agriculture Produce and Livestock Marketing (Promotion and Facilitation) Act of 2017, a reform aimed at helping farmers sell their produce directly to buyers.

“We have said that states which are forthcoming in implementing the APLM Act should be rewarded by giving them infrastructure or other projects more money in Central schemes,” said a member of the panel on condition of anonymity.