Food & Public Distribution Ministry’s Estimates on Total Food Subsidy Bill

The Ministry of Food And Public Distribution estimated that the total food subsidy bill will increase to 110600 crore if entitlements recommended by the Sonia Gandhi-headed National Advisory Council are incorporated into the Food Security Bill. The estimates by the Ministry of Food And Public Distribution are significantly higher than the ones made by both NAC and the Rangarajan panel that studied the NAC recommendations.

NAC had estimated a total subsidy burden of 71837 crore in the initial phase and 79931 crore in the final phase. The Rangarajan panel had held that the subsidy burden is likely to be higher, at 85584 crore in the initial phase and 92060 crore in the final phase. The ministry's estimations assume 100% absorption of the scheme by states, while the NAC had assumed an 85% utilisation in their calculation.

Ministry of Food And Public Distribution headed by Congress leader KV Thomas will be the nodal agency for implementing the ambitious flagship welfare programme on food security of the UPA government. The aim of both NAC and the Rangarajan panel is to make essential commodities and nutrition available to the common man and there is currently a broad consensus over the benefits that the priority category, or the below poverty line segment will receive. The legal entitlement will cover 46% of the rural population and 28% of the urban population and will constitute 35 kg grain per month. Rice will be provided at Rs3 per kg and wheat will be provided at Rs2 per kg.