The Economic Surveys of the last three years have included a recurring recommendation to address the “burgeoning” food subsidy bill by revising the rates of subsidised grain as well as the number of people covered by the food safety net. This recommendation is conspicuously missing in this year’s report, despite an increase in the subsidy bill.
In 2019, the Survey included a detailed discussion of the rising economic cost of implementing the National Food Security Act (NFSA), 2013, noting that the subsidised rates of ₹2 per kg for wheat and ₹3 per kg for rice at which grains are provided to 81 crore beneficiaries has remained constant even while the cost of procurement and distribution has been on the rise. “For sustainability of food security operations, the issue of burgeoning food subsidy bill needs to be addressed,” it said.
In 2020, the government went a step further, suggesting a revision in the scope of NFSA coverage as well. “The rates fixed under the NFSA initially for a period of three years have not been revised since 2013, resulting in burgeoning food subsidy. The rates under NFSA and the coverage need to be revisited,” it said in the Survey.
Last year’s Survey reiterated the urgency of the issue. “The food subsidy bill is becoming unmanageably large. While it is difficult to reduce the economic cost of food management in view of rising commitment towards food security, there is a need to consider the revision of CIP [Central Issue Prices] to reduce the bulging food subsidy bill,” noted the government.
In this year’s Survey, however, the section on food subsidy was curtailed, with a basic observation on the rising economic cost of wheat from ₹1,908.32 per quintal in 2013-14 to ₹2,993.80 per quintal in 2021-22, with a similar rise in rice cost from ₹2,615.51 per quintal to ₹4,293.79 over the same period.
“However, as a pro-poor measure, the CIPs for NFSA beneficiaries have not been revised since the commencement of the NFSA. Measures are being taken to improve the efficiency of food management to reduce the gap between economic cost and CIP,” the government said in the survey.
The revision of the number of beneficiaries is likely to come up once the results of the 2021 census are released, as the NFSA provides for coverage on the basis of population figures.
