Food supplies minister rules out rollback of price-hikes

BUDGET 2000

India's Consumer Affairs and Public Distribution Minister Shanta Kumar today ruled out rollback of prices of essential commodities through the public distribution system or PDS, saying rationalisation brought about by his ministry would benefit people living Below the Poverty Line or BPL.

Kumar told a press conference in Jalandhar that reduction in subsidy to the tune of Rs 21 billion for the 108 million BPL families would burden a middle class individual to the extent of just Rs 3 -- the cost of a cup of tea.

Against this, doubling the quota of foodgrains for 330 million BPL people would entail an additional subsidy of Rs 22.70 billion.

This rationalisation in the PDS was aimed at benefitting the BPL people where the take off of foodgrains was 95 per cent. "We will be releasing 7.4 million tonnes of additional foodgrains for the BPL through the PDS. If we store this foodgrain it will cost us Rs 13 billion," he said, and queried which of the two options was beneficial?

Kumar said there had been no increase in the issue price of foodgrains in the past ten years while minimum support price of wheat went up by 158 per cent and of rice by 110 per cent. The "economic cost of wheat is now Rs 9 a kilo," he said.

He wondered if it was unjust to charge 50 per cent of this cost from the people when all states had agreed in a National Development Council meeting that the government should only bear 50 per cent of the economic cost of foodgrains.

Kumar said the PDS was not an alternative to the total availibility of foodgrains but just a supplementary effort to help the poor. He said the government agencies only procured 18 per cent of the total foodgrains produced in the country and how it could be expected to take care of 100 per cent food needs of the people?

Admitting to 35 per cent leakage from PDS, the minister said it was the joint responsibility of the Centre and the states to curb this menace. It was not possible to man each of the 45.5 million PDS outlets.''We are also considering invoking Clause 3 of the Essential Supplies Maintenance Act (or ESMA) to curb leakage by the PDS,'' he added.

He said his ministry had launched a social audit of the PDS in 200,000 panchayats. The National Informatics Centre's nation-wide computer network, linking New Delhi with 550 district headquarters in the country was being put to use to monitor the PDS.

The minister regretted that district officials had not started feeding data relating to allocation of the PDS foodgrains in to the NIC network.

On the steep hike of liquified petroleum gas cylinder prices, Kumar said it was still subsidised to the tune of Rs 132 a cylinder.

UNI

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