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Odisha govt has to spend Rs 600 cr less a year on ‘Rs 1 a kg rice’ scheme


Odisha Sun Times Bureau
Bhubaneswar, Oct 4:

The Odisha government will spend around Rs 600 crore less from its exchequer annually for its most popular flagship scheme ‘Rs one a kilo rice’ after the National Food Security Act (NFSA) to be implemented in the state from November 1.


On the other hand, the Centre’s subsidy share will be more. While the state government will incur an expense of Rs 32 crore a month to provide ‘Rs One a kilo rice’ to beneficiaries under BPL and Antodaya Anna Yojana categories, the Central government will spend at least Rs 461 crore.

While the state government earlier used to spend around Rs 1,000 crore annually on this account, it will now have to fork out just Rs 400 crore.

On the other hand, the Centre’s expenditure which was Rs 4,869 crore per annum earlier will now rise to Rs 5,553 crore, which means the Centre will be spending Rs 664 crore more annually in comparison to its earlier spend on the scheme, revealed estimates.

With NFSA set to become operational in 14 districts of the state from November 1, the state government has begun distribution of digitized ration cards to beneficiaries. While Chief Minister Naveen Patnaik launched the distribution of digitized ration cards at state level function hereon October 2, his ministerial colleagues did the job at district level functions.

At functions organized by the state government to distribute new digitized ration cards to beneficiaries under the NFSA, ministers, leaders and MLAs gave the credit to the state government while forgetting to mention the Central government which contributes the lion’s share.

However, before implementing the new programme, the state government has done an estimate of its loss and gain. A joint review by the Finance and Food Supplies & Consumer Welfare departments has revealed that to provide ‘Rs one a kilo rice’ to a beneficiary, the Central government will have to spend around Rs 27 a kg and the state government only Rs 2. The Central government will thus be required to spend more than 13 times theamount the state government spends under the scheme.

While the market price of rice has been officially kept at Rs 30.38 a kg, that of wheat has been pegged at Rs 21.81. Under the existing Public Distribution System (PDS), the Central government provides rice at Rs 3 a kg to Antodaya beneficiaries and at Rs 5.65 to beneficiaries under the BPL category. Similarly, it provides wheat at Rs 2 a kg to beneficiaries under Antodaya Anna Yojana and at Rs 4.15 a kg to BPL beneficiaries and at Rs 6.15 to beneficiaries under the APL category.

Once NFSA is implemented in the state, wheat will be available to both Antodaya Anna and prioritized families at Rs 2 a kg and rice at Rs 3 a kg.

Currently, the Central government is providing 1,43,120 tonnes of rice and 25,781 tonnes of wheat to the state under PDS in a month, while it will provide 1,48, 923 tonnes of rice and 26,826 tonnes of wheat under the NFSA.

The subsidy of Rs 405.76 crore a month currently being provided by the Central government under the PDS will increase to Rs 462.05 crore under the NFSA.

Moreover, the Central government will bear a burden of Rs 72.82 crore a month towards additional quota amounting to Rs 874 crore a year.

Further, the Central government will provide Rs 65 per quintal towards transportation and Rs 70 per quintal to fair price dealers towards distribution of food grains, a provision which was not there in the earlier system.

According to the estimate done by the state government, it will have to fork out Rs 32 crore a month in order to provide ‘Rs one a kg rice’ to all the 3.26 crore beneficiaries fixed by the Central government. The government will have to spend Rs 384 crore annually. Taking into account beneficiaries under the Antodaya Anna yojana, the total spend will come to about Rs 400 crore. Out of the Rs 1400 crore it used to spend annually on the ‘Rs one a kg rice’ scheme, the state government used to spend Rs 400 crore on other beneficiaries and Rs 1,000 crore on beneficiaries belonging to the BPL category. Under the new arrangement, the Rs 1000 crore that the state government used to spend for the BPL category beneficiaries will come down to Rs 400 crore.

Under the PDS currently in vogue, rice is being provided to 36.86 lakh BPL families, 12.53 lakh under the Antodaya Anna yojana, 10,183 fishermen’s families whose livelihoods have been affected due to Olive Ridley turtle breeding, 6.23 lakh Poor Left Out (PLO) families, 4.72 lakh adivasi and harijan students, 1.35 differently-abled  persons and inmates of 1400 Kasturba Gandhi Vidyalayas under the ‘Rs one a kilo rice’ scheme.