PUNJAB GETS 0.5% SUBSIDY FOR CONTRIBUTION
Chandigarh June 21:
Punjab has been contributing maximum foodgrains to the food basket of the country for the past two decades. In fact, Haryana and Andhra Pradesh, who are number two in contribution of wheat and paddy to the Central pool, actually contribute around half of the wheat and paddy.
Yet Punjab’s share in the food subsidy that the government of India doles out to different states is less than 0.5% of the whopping subsidy of over Rs 25,000 crore each year. Even Haryana gets nearly double of Punjab while Andhra Pradesh walks away with over 20 times of that.
The food subsidy is the difference between the economic cost of foodgrains and the issue price which the government of India reimburses to the Food Corporation of India (FCI). The union government has ensured nutritional support to the poor by providing subsidised foodgrains through the Public distribution System (PDS) and ensuring price stability in different states.
Since the off-take of foodgrains from the PDS system is abysmally low, Punjab got only Rs 84.4 crore on an average during the past two years while Haryana got Rs 207.1 crore, Rajasthan Rs 635.4 crore, Kerala Rs 748.1 crore. While the biggest state Uttar Pradesh got Rs 3395.3 crore followed by Tamil Nadu Rs 2615.7 crore, Andhra Pradesh Rs 2329.1 crore, Maharastra Rs 1841.6 crore, West Bengal Rs 1748.3 crore, Karnataka Rs 1510.5 and Orissa Rs 1121.1 crore on an average during the past two years.
Incidentally, the Punjab government has never raised the issue of getting adequate compensation on account of low food subsidy because the state is self-sufficient and the off-take of foodgrains from its PDS system would never match other states. Punjab has 2.5% population of the country and its share is just one fourth of it while Haryana has far less population and its subsidy share is more than double of Punjab.
While the economic cost of the foodgrains continue to rise because of annual increase in the minimum support price (MSP) and the state levies, the price of the foodgrains through the PDS for the below poverty line (BPL) families and those identified under the Antyodaya Anna Yojna (AAY) has remained constant since July 1, 2002. But the gap between the economic cost and issue price have been yawning since then.
The food subsidy bill was stabilised around Rs 25,000 crore since 2003-04 for various reasons - the stocks were liquidated initially which lowered their carrying-over cost and subsequently the procurement was low during the past two years. Also, rationalisation of allocation of wheat to tide over shortages since 2006 too lowered the food subsidy bill.
But the record procurement of wheat and much higher procurement of rice this year and that too at a quantum jump over the MSP over the last year would raise the food subsidy bill substantially. However, Punjab would continue to get its meagre share in the food subsidy because with good wheat production this year, the off-take of foodgrains in the state would remain low, notwithstanding the differential between the PDS prices and prevailing market prices.
Chandigarh June 21:
Punjab has been contributing maximum foodgrains to the food basket of the country for the past two decades. In fact, Haryana and Andhra Pradesh, who are number two in contribution of wheat and paddy to the Central pool, actually contribute around half of the wheat and paddy.
Yet Punjab’s share in the food subsidy that the government of India doles out to different states is less than 0.5% of the whopping subsidy of over Rs 25,000 crore each year. Even Haryana gets nearly double of Punjab while Andhra Pradesh walks away with over 20 times of that.
The food subsidy is the difference between the economic cost of foodgrains and the issue price which the government of India reimburses to the Food Corporation of India (FCI). The union government has ensured nutritional support to the poor by providing subsidised foodgrains through the Public distribution System (PDS) and ensuring price stability in different states.
Since the off-take of foodgrains from the PDS system is abysmally low, Punjab got only Rs 84.4 crore on an average during the past two years while Haryana got Rs 207.1 crore, Rajasthan Rs 635.4 crore, Kerala Rs 748.1 crore. While the biggest state Uttar Pradesh got Rs 3395.3 crore followed by Tamil Nadu Rs 2615.7 crore, Andhra Pradesh Rs 2329.1 crore, Maharastra Rs 1841.6 crore, West Bengal Rs 1748.3 crore, Karnataka Rs 1510.5 and Orissa Rs 1121.1 crore on an average during the past two years.
Incidentally, the Punjab government has never raised the issue of getting adequate compensation on account of low food subsidy because the state is self-sufficient and the off-take of foodgrains from its PDS system would never match other states. Punjab has 2.5% population of the country and its share is just one fourth of it while Haryana has far less population and its subsidy share is more than double of Punjab.
While the economic cost of the foodgrains continue to rise because of annual increase in the minimum support price (MSP) and the state levies, the price of the foodgrains through the PDS for the below poverty line (BPL) families and those identified under the Antyodaya Anna Yojna (AAY) has remained constant since July 1, 2002. But the gap between the economic cost and issue price have been yawning since then.
The food subsidy bill was stabilised around Rs 25,000 crore since 2003-04 for various reasons - the stocks were liquidated initially which lowered their carrying-over cost and subsequently the procurement was low during the past two years. Also, rationalisation of allocation of wheat to tide over shortages since 2006 too lowered the food subsidy bill.
But the record procurement of wheat and much higher procurement of rice this year and that too at a quantum jump over the MSP over the last year would raise the food subsidy bill substantially. However, Punjab would continue to get its meagre share in the food subsidy because with good wheat production this year, the off-take of foodgrains in the state would remain low, notwithstanding the differential between the PDS prices and prevailing market prices.
