Govt to save Rs 1,600 crore every year in foodgrain procurement post GST
Paswan said that budget allocation for food ministry has been increased to Rs 2.24 lakh crore in 2018-19 from Rs 1.96 lakh crore in this fiscal.business Updated: Feb 09, 2018 18:01 IST
The central government is estimated to save Rs 1,600 crore annually in procurement of foodgrains as its tax expenses have reduced after the introduction of Goods and Services Tax (GST), food minister Ram Vilas Paswan said on Thursday.
The money will be saved as only GST would be levied on procurement and not state taxes, resulting in 18% reduction in taxes on foodgrain procurement, he said.
Paswan said the government will infuse equity in the Food Corporation of India (FCI) next fiscal to reduce interest burden, as was announced in the union budget’s target of capital restructuring of the organisation. FCI, the government’s nodal agency for procurement and distribution of foodgrains, will also issue long-term bonds.
Paswan said that budget allocation for food ministry has been increased to Rs 2.24 lakh crore in 2018-19 from Rs 1.96 lakh crore in this fiscal. The food subsidy has been increased to Rs 1,73,323 crore from 1,44,781.69 crore in this financial year.
He also said the budget outlays for consumer affairs department is Rs 1,804.52 crore for next fiscal, as against 3,733 crore this fiscal. This is because of reduction in price stabilisation fund to Rs 1,500 crore from Rs 3,500 crore.
“The food subsidy bill has been rising as MSP is being increased every year, while the issue (sale) price of foodgrains under food law has not been hiked,” he said.
The government has deleted 2.75 crore bogus ration cards which has helped in providing Rs 17,500 crore worth subsidy to eligible beneficiaries, he said.
Paswan said the government has linked over 80 per cent of ration cards with Aadhaar. Point of Sale (PoS) machines are being deployed in ration shops.
This will help food ministry to introduce portability of PDS under which beneficiaries can take their foodgrains quota from any ration shops in the states.