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Panel cuts down plan to offload foodgrain

Food Ministry proposed offloading 13 MT,got EGoM approval for 8 MT

Written by Manoj C G | New Delhi | Published: June 20, 2012 12:45:02 am

Caught between mounting stocks and fear of galloping food bill,the Empowered Group of Ministers on management of foodgrain stocks on Tuesday tweaked a Food Ministry proposal that required about Rs 17,000 crore of subsidies to offload 13 million tonnes of foodgrain through ration shops and open market. The proposal would have eased the storage crisis — a major worry of the ministry — to some extent,but increased the fiscal burden.

The ministry’s proposal was to release an additional eight millions tonnes of highly subsidised wheat and rice to BPL families,two million tonnes at APL prices and another three million tonnes of foodgrain to be sold in open market.

The EGoM,headed by Finance Minister Pranab Mukherjee,however,did not approve the proposal in toto. The EGoM,instead,approved offloading eight million tonnes,including five million tonnes to BPL families under the public distribution system and another three million tonnes in the open market,with a total additional subsidy burden of a little over Rs 10,000 crore.

Significantly,the proposal to release 13 million tonnes of foodgrain to ease the pressure on storage was mooted by C Rangarajan,Chairman of Economic Advisory Council to the Prime Minister in May. According to the Department of Food,the total stock of rice and wheat in the Central pool as on June 1 was 75 million tonnes against a covered storage capacity of 62.8 million tonnes.

“The EGoM has agreed to allocation of additional five million tonnes of foodgrain to BPL families. It has also agreed to allow three million tonnes of wheat through OMSS (open market sale scheme),” Food Minister K V Thomas said. For APL families,Thomas said the government had allocated two million tonnes of foodgrain last fiscal,but only about 50 per cent were lifted by states. Hence,the EGoM allocated the remaining one million tonnes for this year.

The allocation of five million tonnes of foodgrain to BPL families will cost the exchequer Rs 8,500 crore,while the sale of three million tonnes through OMSS would entail a subsidy burden of Rs 1,600 crore.

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