MINISTER OF CONSUMER AFFAIRS AND PUBLIC DISTRIBUTION
( SHRI SHANTA KUMAR )
(a),(b),(c) & (d): A statement is laid on the Table of the House.
STATEMENT REFERRED TO IN REPLY TO PARTS (a),(b),(c) & (d)) OF STARRED QUESTION NO. 389
FOR ANSWER IN THE LOK SABHA ON 20-04-2000.
(a) & (b): Yes, Sir. The news item reports as follows:
i) `When the States are refusing to lift their existing quota of foodgrains under PDS it
makes little sense to raise the quota of BPL families`.
ii) `The Government has burdened the poor families with higher prices to keep subsidy bring
down to Rs.8210 crores; precious little has been done to bring down the economic cost of
foodgrains by bringing in better efficiency as far as procurement, distribution, transportation
and distribution is concerned. 75% of the subsidy bill actually goes into subsidizing the
operational inefficiency of the FCI`.
iii) `The best way to cut subsidy bill is to take the radical step of privatizing the whole
procurement, storage, transportation and distribution system so that a huge part of the losses
are recouped`.
The Government does not agree with any of the above contentions. The off take for BPL
families under TPDS has been on an average about 80% of the allotment and has been continuously
increasing since it was introduced. Major components of the economic cost of wheat and rice
consist of minimum support price; statutory charges consisting of mandi charges, purchase tax
etc.; non-statutory charges consisting of labour and transport charges, storage and interest
charges, cost of conversion of paddy into rice, freight and handling charges, storage and
transportation charges. Only two percent of the economic cost is on account of the
administrative charges of the FCI. Hence it is not correct to say that 75% of the subsidy bill
actually goes into subsidizing operational inefficiency of FCI. In the vital field of food
security, the Government would not like to abandon its traditional responsibility of procurement
and distribution of foodgrains. However, the Government is prepared to privatize as many
activities as feasible in the interest of efficient operations.
(c) While doubling of foodgrains for BPL has been welcomed by almost all the States,
increase in prices has been criticized.
(d) It has been estimated that the changes affected in PDS with effect from 1.4.2000 has
transferred about 40% more resources in the favour of poor. While withdrawing the subsidy
from the non-poor, adequate supplies have been assured to this group of consumers only. The
Government feels that these measures are pro-poor.
