GoM okays food bill draft, but minor issues persist

A high-level inter-ministerial panel on Monday approved the draft national food security bill, which the Centre expects to place before Parliament in monsoon session beginning August 1, a government functionary said.

A high-level inter-ministerial panel on Monday approved the draft national food security bill, which the Centre expects to place before Parliament in monsoon session beginning August 1, a government functionary said.

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The empowered group of ministers (EGoM) on food, headed by finance minister Pranab Mukherjee, agreed on the bill’s major provisions, even though some minor issues are yet to be sorted. The bill is due to be sent to the law ministry for vetting.

The bill stems from the Congress’s poll promise of making access to affordable rice or wheat for the nation’s citizens a legal right.

Bolivia is the only other nation with a similar law.

Among the major provisions, the Centre will hand out subsidised food to 75% of rural households, of which 46% forms the so-called ‘priority category’ or those living below the poverty line (BPL).

Each individual from BPL families will get a monthly quota of 7 kg of rice, wheat or millets for Rs3, Rs2 or Rs1 respectively. The entitlements for rural households above the poverty line, or the ‘general category’, however, will be fixed within the next few days. They could either be 3 kg or 4 kg for an individual each month.

On the other hand, the food law will cover 50% of India’s urban households, of which 28% form the BPL category. Such households will get grains at a cost linked to the price at which the Centre buys from farmers, also called the minimum support price. Even so, they will be cheaper than market rates.

India’s headcount of BPL people is decided on the basis of a combination of 13 socio-economic parameters, including daily expenditure of Rs20, while World Bank estimates a quarter of India’s billion people will be living in poverty by 2015 or earn less than Rs100 a day.

Exports freed

The EGOM has decided to allow export of wheat

Also decided to export 3 lakh tonne of rice to Bangladesh

Million tonnes of privately traded rice will also be exported, along with 6.5 lakh tonne of wheat

Govt will also allow additional 5 lakh tonnes of wheat to be exported through diplomatic channels for needy countries

India's decision to export wheat could push up domestic prices. However, the decision should not be inflationary because of abundance

The govt is closely monitoring domestic sugar prices too.