FCI rice not coming, Karnataka set to transfer cash instead of 5 kg promised rice

The cash benefits will be transferred to accounts of families with Below Poverty Line (BPL) ration cards, with each beneficiary receiving Rs 170 — equal to the price of 5 kg rice at Rs 34 per kg. Thus, a family of four will get Rs 680 deposited in their account. This arrangement will continue until the government succeeds in getting rice, following which the DBT will be stopped, it was informed.

The scheme, one of the Congress’s five pre-poll guarantees, hit a roadblock after the Food Corporation of India (FCI) on June 13 discontinued sale of rice and wheat to states following the Union Consumer Affairs, Food and Public Distribution Ministry’s directions.

Siddaramaiah had on June 14 told the media that the decision came a day after the FCI had agreed to supply grains to Karnataka at Rs 36.6 per kg, including transportation cost of Rs 2.6 per kg. He also criticised the Narendra Modi-led Centre for allowing sale of grains to private suppliers but barring state governments from procuring them from FCI.

In a statement, the FCI said the decision was part of the Centre’s ”market intervention programme” to “control inflationary trends and rein in rising prices of wheat and rice”.

On Wednesday, Siddaramaiah said the state government is going for open market tender since it has not been able to procure rice even from agencies such as the National Cooperative Consumers Federation, the National Agricultural Cooperative Marketing Federation, and Kendriya Bhandar. “They quoted a higher price than FCI for the grains,” he said.

He also said appeals made to Union ministers Amit Shah and Piyush Goyal to allow supply of rice to states to help the poor went in vain.

According to state Food and Civil Supplies Minister K H Muniyappa, the monthly outgo for the cash transfer arrangement will be between Rs 750 crore and Rs 800 crore. This is less than the monthly cost of Rs 840 crore to provide 5 kg rice to BPL families, as was estimated earlier, since the government plans to make DBT of Rs 34 for each kg of rice, as against Rs 36.6 per kg — including Rs 2.6 transportation cost per kg — that the FCI supply was to have cost.

The cash transfer will be based on Aadhaar numbers of beneficiaries, which are linked to bank accounts and their ration cards. “Around 95 per cent of BPL cards are Aadhaar-linked. The remaining (cards) will be linked soon to transfer benefits,” state Law and Parliamentary Affairs Minister H K Patil said.

Taking a dig at the Congress government, Opposition BJP thanked Siddaramaiah for “admitting” that the Centre was giving 5 kg rice per beneficiary per month. “What you have to transfer is not just the cost of 5 kg rice. The manner in which you thumped your chests, saying the state government would supply 10 kg rice, you should transfer the cost of 10 kg per person to people’s accounts,” the party demanded.