Drought has hit Centre’s coffers

The Centre is sitting on huge stocks of grain, which means that there’s probably enough to go round.

Speaking to The Indian Express, Rural Development minister Shanta Kumar said that, since last year, almost 49 lakh tonnes of foodgrains had been allocated to the states. ‘‘Of this they have lifted only 30 lakh tonnes and used only 15 lakh tonnes. As soon as they consume this, more grain would be made available under various schemes to these states.’’

But that’s not the top priority for the affected states: they want hard cash. According to the Centre’s own estimates, while precise demands have not yet been made by states, funds requirements are likely to be in excess of Rs 10,000 crore.

The Calamity Relief Fund — made up of contributions from the Central and State governments in a 3:1 ratio — has a kitty of just Rs 1,800 crore, including the Centre’s contribution of Rs 1,200 crore.

Among the measures discussed by the task force — which includes Deputy Prime Minister L K Advani with Finance Minister Jaswant Singh, Agriculture Minister Ajit Singh, Food Minister Sharad Yadav and Rural Development Minister Shanta Kumar — was the option of dipping into the kitty of the National Calamity Contingency Fund. This fund is fed by the surcharge on central taxes.

Other measures discussed:

• Enhancing the overdraft limits of states facing a drought and caught in a financial bind

• Deploying the Railways to transport water and fodder free or at very concessional rates to affected areas

The decisions taken today include:

• Providing old and cattle-grade food grains from FCI godowns to the states for free

• Deferring loan repayments of not only small and marginal farmers but also big farmers. Relief could also be in the form of input subsidy to these farmers.