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House nod needed, Centre builds case for lower food law coverage

The minutes of the February meeting shows that the CEA has been asked to provide inputs on the issue.

Written by Harikishan Sharma | New Delhi |
Updated: March 31, 2021 4:34:22 am

FOLLOWING A recommendation detailed in a NITI Aayog discussion paper, the Centre has started the process of building a “reasonable basis and justification” to push the idea of reducing the national coverage ratio under the National Food Security Act, 2013 from the existing 75 per cent of rural population and 50 per cent of urban to a 60:40 formulation.

Sources told The Indian Express that the issue was discussed during a meeting chaired last month by NITI Aayog member Ramesh Chand.

The meeting, which was held on February 15 to discuss a background paper on “National Food Security Act (NFSA) towards Hunger-Free India”, was attended by Chief Economic Advisor (CEA) Dr K V Subramanian, Food Secretary Sudhanshu Pandey and other officials from the ministries of Rural Development, and Statistics and Programme Implementation.

On February 28, The Indian Express had first reported on the NITI Aayog paper’s recommendation that reducing the coverage ratio in this manner would result in the Government saving an estimated Rs 47,229 crore annually.

The minutes of the February meeting shows that the CEA has been asked to provide inputs on the issue. “To build reasonable basis and justification for the technical exercise undertaken for reduced National Coverage Ratio to 60 (rural): 40 (urban) under NFSA. The input for the same may be provided by CEA,” the minutes state.

Explained

Why NITI suggested coverage reduction

A discussion paper of the NITI Aayog justified the move “on account of increase in real per capita income for the country from Rs 63,462 in 2011-12 to Rs 94,954 in 2019-20”. The estimation was, if national rural-urban coverage ratio remains the same, updating the population level from Census 2011 to projected 2020 population will expand NFSA’s coverage base from 81.35 crore to 89.52 crore. But if it is reduced to 60:40, the number of beneficiaries will drop to 71.62 crore.

During the meeting, sources said, the CEA suggested that a “strong argument” should be made “in favour” of reducing the national coverage ratio under NFSA, which is a politically sensitive move. “On the part of reducing the NFSA coverage to 60 (rural): 40 (urban), CEA opined that a strong argument in favour of this exercise should be developed,” sources said.

To make any such change in the law, the Government will have to amend several provisions of the NFSA, 2013, for which it will require Parliamentary approval.

The CEA suggested a study of “the past two years Economic Surveys, especially considering the Basic Necessity Index for developing the argument for pushing for 60:40 ratio”, sources said.

Chand, who has held several meetings on the issue, supported the suggestion given by the CEA, they said. The NITI Aayog member said that “reasonable arguments may be developed if national coverage ratio is proposed to be considered at 60 (rural): 40 (urban)”, sources said.

Overall, NFSA caters to 67 per cent of the total population. Under NFSA, each Antyodaya Anna Yojana household (approximately 2.37 crore households or 9.01 crore persons, as on February 1) is entitled to 35 kg of foodgrains per month, while the priority households (approximately 70.35 crore persons) are entitled to 5 kg per person per month.

Based on the rural and urban coverage ratio, the erstwhile Planning Commission had determined the state-wise coverage ratio using the National Sample Survey Household Consumption Expenditure coverage under food security law Survey data for 2011-12. The coverage ratio has not been revised since the law came into effect on July 5, 2013.

Recommending a reduction, the discussion paper of NITI Aayog justified the move “on account of increase in real per capita income for the country from Rs 63,462 in 2011-12 to Rs 94,954 in 2019-20”.

The paper estimated that if the national rural-urban coverage ratio remains the same, updating the population level from Census 2011 to the projected population in 2020 will expand the NFSA’s coverage base from 81.35 crore to 89.52 crore. However, if it is reduced to 60:40, the number of beneficiaries under the NFSA, will drop to 71.62 crore.

Given the population increase since the food security law was enacted, there have been demands from states and union territories to update the list of beneficiaries through an annual system, said sources.

It was in this context that the Ministry of Consumer Affairs, Food and Public Distribution had asked NITI Aayog to suggest an alternative methodology for “covering beneficiaries under NFSA, including prospective beneficiaries”.

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