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NAC vs PMO over grains, again

The Sonia Gandhi headed National Advisory Council (NAC) and Prime Minister's Office are heading for another confrontation with both rejecting each other's recommendations.

delhi Updated: Jan 14, 2011 00:19 IST
Chetan Chauhan

The Sonia Gandhi headed National Advisory Council (NAC) and Prime Minister's Office are heading for another confrontation with both rejecting each other's recommendations.

The NAC last year had recommended that legal entitlement to subsidized food-grains should be extended to at least 72 % of the population in the next four years in the proposed National Food Security law.

Points of conflict

NAC recommendation
Provide 7 KG per capita food grain entitlement to priority household, 46 %
of rural and 28 % urban population.
Provide 2 kg per capita to remaining general households up to 75 % of the
total population.

PM committee recommendation
Provide 7 kg per capita food grain entitlement to only 46 % rural and 28 % urban households in the proposed law.
Others to be covered through executive order as per availability of food
grains.

NAC estimation of annual cost for its recommendation: Rs 80,000 crore
PM committee said NAC recommendation would cost: Rs 92,000 crore
Annual cost of PM committee recommendation: Rs 69,000 crore

NAC estimation of food grains required for its recommendation: 54 million tonnes
PM committee estimation of grains required to implement NAC recommendation: 69 million tonnes.
Food grains required to implement PM committee recommendation: 52 million tonnes
Foodgrains availability in 2013-14 : 57 million tonnes.
India requires strategic stock of five million tonnes as buffer.

The Prime Minister's Expert Committee rejected the NAC recommendation saying it was not feasible considering project food availability and large subsidy implications (of Rs 92,000 crore).

It instead suggested that the proposed law should cover only new below poverty line population of 46 % in rural areas and 28 % in urban areas as recommended by Tendulkar Committee. If the recommendation is accepted the proposed law will cover only those under the Public Distribution System(PDS).

The recommendation is quite similar to what a Group of Ministers headed by Finance Minister Pranab Mukerjee had said in early 2010.

"I am disappointed with the expert committee's view," said NAC member and former plan panel secretary N C Saxena. Some other NAC members also supported his comments saying the committee headed by C Rangarajan, head of Prime Minister's Economic Advisory Council, had failed to take a
realistic look at the NAC recommendations.

Saxena said the government could have looked at first implementing the NAC recommendations in country's 200 backward districts and then expanded to other districts depending on the food grain stock on pattern similar to Mahatma Gandhi National Rural Guarantee Scheme.

Some NAC members said that implementing NAC recommendations was possible if the country were able to plug up to 60 % leakages in the Public Distribution System and improve procurement of food grains from Bihar, eastern Uttar Pradesh and states such as Chhattisgarh and Gujarat.

The expert's committee's report will be discussed at the next NAC meeting on January 21.