The Union Budget has made a provision of Rs 10,000 crore for the Food Security Bill. But on a closer look it shows that usual subsidy has been lowered from Rs 85,000 crore in Revised Estimate (RE) of 2012-13 to Rs 80,000 crore in the Budget Estimate (BE) of 2013-14. At the same time, an extra allocation of Rs 10,000 crore has been made for Food Security Bill. How do you explain this? Has the food subsidy been under provisioned?
Well, it has never happened that the entire food subsidy requirement of the department of food has been met at the time of the Budget itself. Some provisioning is also made later during the year. The subsidy requirement in any year may be more than the provision, which is met either at later stages, or rolled over to the next year. And, moreover, this entire Rs 90,000 crore will be non-plan expenditure on the account of Food Corporation of India (FCI), which is a mainly subsidy. So there is no question of under provisioning of food subsidy.
Is there any possibility that lower provisioning for food subsidy might hurt procurement operations in 2013-14?
I can categorically assure you that whatever has been provided in the Budget by way of food subsidy will in no way hamper FCI’s procurement or storage operations. FCI’s financial requirement is fully owned by the government and the same will continue to be there in 2013-14 as well.
With this provisioning of Rs 90,000 crore in the Budget for food subsidy will you be able to roll out the National Food Security Bill?
Absolutely, we are readying the National Food Security Bill. The implementation of the Bill now depends on two factors, approval by Parliament and preparedness of the state governments for the roll out. As far as 2013-14 is concerned we do not expect a huge financial burden on account of the Bill because we are aware that state governments will be able to implement the Bill in phases only as the capability to do so varies from state to state. By capability I mean their level of preparedness, digitization of ration cards, identification of beneficiaries etc. Also, the actual expense on account of Food Security Bill will be known only when the full programme is rolled out. Due to the various steps that we are taking bogus ration cards will be weeded out, moreover, in the current PDS, allocation is made on per family basis, while in food bill it will be on the basis of persons. So, there are various ways to limit the expenses.
There was a talk that some provision for imposition of excise duty could be made in the Budget to offset the subsidy likely to be incurred after a proposal to abolish levy sugar mechanism (sold through ration shops) is implemented. But, it has not happened, so where does the proposal to decontrol sugar sector stand?
Well, the proposal related to decontrolling the sugar sector was not expected to be taken in the Budget as it is a policy matter. Making no provision in the Budget does not mean that it will not come; only the government has not arrived at a decision on the proposal yet. But, I’m sure that we will find a way out to ensure that the subsidy burden on the Finance Ministry because of decision to abolish the levy obligation of sugar is not huge.