2 red flags for NAC proposals on food law

The Planning Commission and food ministry have raised a red flag over implementation of the recommendations of the National Advisory Council regarding the new food security law from the next financial year, but for different reasons. Chetan Chauhan reports.

The Planning Commission and food ministry have raised a red flag over implementation of the recommendations of the National Advisory Council regarding the new food security law from the next financial year, but for different reasons.

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The commission has cited fiscal constraints whereas the ministry has expressed inability to procure adequate foodgrains according to the NAC wish.

The plan panel believes that implementing the food security law in the scale recommended by NAC may not be possible as it would require an additional food subsidy of Rs 32,000 — almost a 50% increase in the budget. The panel expects the plan budget for 2011-12 to increase by about 15 per cent from the existing Rs 3,74,000 crore.

NAC, headed by Sonia Gandhi, wanted the government to implement the first phase from April 1, 2011, to cover 85% of the rural population and 40% of the urban population with an additional subsidy burden of Rs 15,000 crore for 2010-11. In the final phase, 90% of rural and 50% of urban population will be covered by 2014, costing the government an additional Rs 23,000 crore.

The panel says NAC has failed to take into account the increase in higher minimum support price and other incremental costs, a probable reason for the difference in government and NAC estimate on food subsidy of about Rs 9,000 crore.

The panel says implementing NAC recommendations would result in funds crunch for other social sector schemes, especially Right To Education for which education outlays will have to be increased substantially in the next budget.

Expanding the health mission to urban areas will also require funds. In addition, the budget for the National Rural Employment Guarantee Scheme is set to increase with the government looking at increasing wages.

The plan also believes that implementing the proposed food security law without reforming the public distribution system to plug leakages will not be a good idea. "Reforming PDS will take a minimum of one year," the functionary said.