Food Subsidy Cut: AP, TS bear more burden

According to the revised statistics of the Centre, only 60.96 per cent of rural population and 41.04 per cent of urban population in Telangana and Andhra Pradesh respectively live below the poverty line (BPL). But, the BPL cards issued in the two States outnumber the total population

As per the new guidelines of the Food Security Act, the Centre will reimburse the rice subsidy for people living below the poverty line only. If any State government wants to extend the rice subsidy to more number of people, it should bear the additional financial burden.

According to the revised statistics of the Centre, only 60.96 per cent of rural population and 41.04 per cent of urban population in Telangana and Andhra Pradesh respectively live below the poverty line (BPL). But, the BPL cards issued in the two States outnumber the total population.

The NDA government introduced NFSA last year and asked all the States to implement it. Under the scheme, rice is sold at Rs 3 per kg, wheat at Rs 2 per kg and coarse grain at Rs 1 per kg. Till date, the scheme has been extended up to 70% of the rural population and 50% of the urban residents.

The scheme is expected to cost the Government of India Rs 1.2 trillion in 2015-16. So far, 18 States and Union Territories have implemented the law, while 10 more are expected to roll out the scheme by the end of the financial year.

As per Census 2011, Telangana State has a population of 3.5 crore, of which 2.85 crore people have been getting subsidised rice with 6kg rice per person at Rs.1 per kg and other essential commodities under various schemes like Antyodaya Anna Yojana (AAY), as of now; there are 15.46 lakh AAY beneficiaries in the State, where 35 kg rice is supplied at Rs 1 per kg irrespective of the number of family members in the State.

But as per the NFSA rules in vogue, only 1.93 crore people would be eligible. Ninety three lakh people would be left out of the scheme. The requirement of rice per month for all schemes covered under the PDS in the State would be 1.8 lakh tonnes. But the Centre would provide only 1.13 lakh tonnes, as per their norms, to 1.93 crore cardholders.

The remaining 67,000 tonnes of rice have to be procured for the uncovered population of the State at the rate of Rs 26 per kg and supplied to them at Rs 1 per kg. This would be a great burden on Telangana government.

As per the Food Security Act Rules, eligible families (about 2.85 crore persons) are entitled to get rice at Rs 3 per kg, wheat at Rs 2 per kg and coarse cereals at Rs 1 per kg. The Telangana government will provide 6 kg rice per person at Rs 1 per kg instead of 5 kg rice at Rs 3 per kg.

All the beneficiaries having 90.46 lakh food security cards (covering 2.85 crore persons) would get the ration from FP shops. Getting subsidised food is beneficiaries ‘right’ as per the Act.

The State government is all set to issue food security cards to 2.85 crore people. The eligibility criterion for BPL families (priority households) has been increased for rural areas to Rs 1.5 lakh and Rs 2 lakh in urban areas.

The ceiling on holding of land has also been increased to 3.5 acres of wet land and 7.5 acres of dry land. However, it was specified that income on land will be taken as criteria for issue of NFS cards.

The revised income eligibility from Rs 75,000 to Rs 2 lakh per annum in Hyderabad saw a 25 per cent jump in the beneficiaries availing the National Food Security Scheme (NFSS). Currently, as per data, there are 8.09 lakh families in Hyderabad availing of NFSS. The number of families holding ration cards in July 2014 in the city was 6.88 lakh. However, it was brought down to 6.29 lakh in December last year after Aadhaar seeding.

Nonetheless, the number again increases to 8.09 lakh following the new norm for BPL
families. As per records, 1,73,03,799 kg of subsidised rice is consumed by the BPL families in Hyderabad jurisdiction every month. But, the Centre has asked both States to implement the new guidelines under the Food Security Act with effect from October 1, 2015.

This will impose a financial burden of about Rs 2,000 crore on the two Telugu States. While Telangana will have to cough up about Rs 700 crore, Andhra Pradesh will have to spend about Rs 1,250 crore to meet the additional rice subsidy.

Now, Telangana government may have to shell out about Rs 700 crore to procure additional 40 lakh tonnes of rice for distribution to BPL families in the State as the Centre has cut down the rice supply to 80 lakh tonnes from 1.2 lakh tonnes.