House panel asks Govt to sort out `81K-cr food subsidy fund crunch

The Food Ministry is facing a shortage of over Rs 81,000 crore for making subsidy payments, a Parliamentary panel said on Monday asking the government to sort out the issue at the earliest.

“The Committee are also constrained to note that the Department of Food and Public Distribution has been struggling with overall shortage of funds for food subsidy of as high as Rs 54,858.84 crore as on April 1, 2015. “If the less allocation at BE 2015-16 of Rs 26,429 crore is added, the total shortage of funds to be payable to FCI and DCP states reaches to Rs 81,287.84 crore...,” the Standing Committee on Food, Consumer Affairs and Public Distribution said in its report presented in Parliament.

Of the total shortage of Rs 81,287.84 crore, the report said that Rs 73,338 crore pertains to the Food Corporation of India (FCI), the nodal agency for procurement and distribution of foodgrains. The rest Rs 7,949.84 crore is payable to DCP states, which means the states where the procurement system is decentralised. Stating that the department is getting less funds for food subsidy payments that has resulted in arrears, the Committee suggested that the “issue of gap between demand and allocation and clearance of pending arrears need to be sorted out expeditiously”.

The panel expressed concern over the non-implementation of National Food Security Act (NFSA), which came into force on July 5, 2013, in 25 states. Government has earmarked Rs 1,24,419 crore for food subsidy for the current fiscal. Of the total food subsidy, nearly Rs 65,000 crore is for implementation of NFSA. With only 11 states rolling out food law so far, the Centre has recently extended the deadline to implement the food law by six months to September this year. The Committee felt that giving extension after extension to these 25 states “does not augur well with overall preparedness towards implementation of the NFSA and 

recommend the Department of Food and Public Distribution to set up a task force for quickening/

completion of the work in these 25 non-compliant states,” the report said.

The food law aims at providing a legal entitlement to 5 kg of subsidised foodgrains per person per month at Rs 1-3 a kg to two-thirds of the country’s population.