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Subsidy cut on hold

THE UNION Cabinet?s decision to cut the food subsidy Bill by reducing foodgrains under the Public Distribution System (PDS) has been put on hold. Agriculture and food minister Sharad Pawar on Tuesday told newspersons that he was ?not executing the decision on the food subsidy cut?.

india Updated: Jan 11, 2006 01:20 IST

THE UNION Cabinet’s decision to cut the food subsidy Bill by reducing foodgrains under the Public Distribution System (PDS) has been put on hold. Agriculture and food minister Sharad Pawar on Tuesday told newspersons that he was “not executing the decision on the food subsidy cut”.

“The entire decision has been stayed. I will discuss this issue with UPA people,” Pawar said on the sidelines of a function to launch a scheme on dairy-poultry venture capital fund. He said he would explain the position to Congress, CPI and CPI (M) leaders, adding: “Untill we sit together on this issue, the decision won’t be executed.”

The Congress had only on Monday asked the coalition government not to go ahead with the scheme. The Cabinet had sought to cut food subsidy for 2005-06 by Rs 4,524 crore by reducing foodgrains for both above poverty line (APL) and below poverty line (BPL) families to 20 kilograms and 30 kilograms, while increasing issue prices for wheat and rice under PDS. Pawar said the decision focussed on only APL and not BPL families.

Wheat and rice issue prices, formulated in 2000, have not been revised since 2003, though procurement prices had been raised annually. Pawar said the Centre bore the burden of higher prices. Pawar further added that agricultural growth, following a good Rabi season, would be over three per cent. He said rice procurement was up by 10 lakh tonne while coverage under wheat was also higher than last year. “Overall foodgrain production prospect is better. The wheat coverage this season is quite good,” he said. However, he declined to give any production estimate for wheat, saying it was too early to project any estimate as the crop was still to enter the maturing stage.

An additional 1.5 lakh tonne wheat would be made available for open sale each month during January-March quarter, Pawar said. “About 1.5 lakh tonne additional wheat will be released on monthly basis for the current quarter.” This additional quantum would be made avaiable through through the Food Corporation of India, he said, adding that this move would keep prices under check.

First Published: Jan 11, 2006 01:20 IST