March 27, 2002

FOOD SUBSIDY: 2001-2002

    A provision of Rs. 13,670 crore was made in budget estimates 2001-02 on the basis of issue prices and economic cost for wheat and rice as on April 1, 2001. This also includes a provision of Rs. 5979 crore as buffer subsidy; according to the Annual Report of the Department of Food and Public Distribution for the year 2001-2002. The quantum of food subsidy depends on the level of procurement of foodgrains and offtake under TPDS and other welfare schemes. Both procurement and offtake are determined by the market prices prevailing in respect of agricultural commodities. There has been increase in procurement on account of attractive MSPs. This coupled with low offtake in 2001-02 has contributed to the increase in the buffer quantity. The increase in buffer subsidy is also partly attributable to the increase in per tonne carrying cost due to increased interest on account of increase in MSP, carry-over charges payable to Punjab and Haryana State Governments and storage cost. The Buffer Carrying Cost, which was estimated at Rs.5979 crore in budget estimates 2001-02, has now increased in the revised estimate to nearly Rs. 6942 crores ; the annual report mentions.

    The provision of food subsidy is placed at Rs. 17607 crore in the revised estimate of 2001-02 excluding sugar subsidy and the subsidy provided in the Budget for 2002-2003 is Rs. 21,200 crores.

    The overall movement of foodgrains by FCI during the report period is estimated to be about 17.54 million tonnes as against 16.16 million tonnes during the previous year. About 154 lakh metric tonnes of foodgrains is expected to move on the inter-state account as against 140 lakh metric tonnes during the previous year.

    During April-October 2001 about 6.44 lakh MTs of foodgrains were inducted in the North Eastern Region as against 3.74 lakh MTs during the corresponding period of the previous year. There has been also increase in offtake. The average monthly offtake in North-Eastern Region during April-October 2001 was about 77,665 MTs per month as against 60,000 MTs per month during the corresponding period of previous year.