With the minimum support price (MSP) of wheat and rice shooting up by more than 70 per cent in the last five years and resulting in a subsidy burden of over Rs 50,000 crore,the UPA government is planning to review the Central issue price (CIP) of food grains supplied to 13.26 crore above poverty line (APL) families through the fledgling public distribution system. CIP,last revised in July 2002,is the price at which the Central government supplies food grains to states and union territories under the public distribution system a network of more than 5.02 lakh fair price shops across the country. If approved by an empowered group of ministers (EGoM),the move could result in a hike in wheat and rice prices for the APL ration card holders. The EGoM will meet later this month. At present,almost 13.26 crore APL ration card holders get wheat at a CIP of Rs 6.10 per kilogram and rice at Rs 8.30 per kg. The CIP of coarse grains that stands at around Rs 1.50 per kg for the APL category was last revised in 2007,sources said. Sources say the EGoM would take up the issue of CIP revision of food grains supplied through the PDS to APL families in the next meeting. At present,the Centre bears a subsidy burden of around 59.5 per cent for wheat supplied to APL category under the PDS,while also shouldering a burden of 56 per cent for rice. In 2009-10,around 190.20 lakh tonnes of food grains have been allocated to states and union territories under the APL category as against 112 lakh tonnes allocated in 2008-09. Due to declining stock position of food grains in the Central pool in the last few years,the Central government has rationalised the allocations under the APL category based on the past offtake and availability of food in the Central pool. Around 10-35 kg of food grains are allocated to each APL family per month in different states and union territories. In March,though the government had planned to cap the food grains allocated to APL families at 13.6 lakh tonnes,however it was withheld because of drought and floods in several parts of the country. In October 2009,the Centre earmarked around 18.21 lakh tonnes of rice and wheat to APL families. Sources say the eGoM is also expected to look at the management of wheat and rice stocks in the current year and raise the quantum of edible oils exported in small packages of five kilograms. The issue of revision of reserve price of sale of wheat to end users under the open market sale scheme (OMSS) could also be considered,say sources. The food ministry is working on a formula to reduce the cost of wheat sold through OMSS by Rs 150 to Rs 300 per quintal to make it more attractive for bulk consumers such as flour millers.
