Faced with a problem of plenty against the backdrop of a record foodgrain production. Prime Minister Manmohan Singh is likely to approve a set of arrangements to deal with the problem of food management on Wednesday in a high-level meeting. Among the likely course of actions are additional disbursal of 17 million tonnes of foodgrains through public distribution system and the option to export with subsidy.
“The Prime Minister will decide how to deal with the issue of foodgrain management. We have proposed to distribute additional 8 million tonnes of wheat to below poverty line (BPL) category and 6.5 million tonnes of wheat to above poverty line (APL) based on the latest Census. We have also proposed to give 25 lakh tonnes of wheat for open market supply scheme under the bulk and retail categories,” said Union minister of state for food and public distribution K.V. Thomas.
While the food ministry is keen on distribution of foodgrains within the country, the Centre is worried over the subsidy burden, which will further zoom if this course of action is resorted to, said a senior official.
Though the food ministry insists that the export subsidy will be the last option, the Centre may opt for it to keep the fiscal deficit in check. The ministry of the view that conditions are not good for exports of the foodgrains and if the government decides to do so it would have to offer export subsidy.
“It will be financially sound to export foodgrains at subsidised rates by which the government can recover more than what it would get through distributing internally. If we were to release the bumper stock of foodgrains internally through the PDS, the food subsidy would further go up. Therefore, it’s a tricky situation and the Prime Minister would take a decision on the issue,” added the official.