Amid concerns about the rising subsidy burden, the government has reviewed the financial implications of the National Food Security Bill which seeks to provide subsidised grains to over half of India's 1.2 billion population.
Finance Minister Pranab Mukherjee is expected to make provisions for the food security bill in the budget for 2012-13 he will present March 16.
Sources said the Prime Minister's Office Tuesday reviewed the bill as food subsidy could go up to Rs.1 lakh crore from Rs.65,000 crore at present when the right to food programme is rolled out sometime in 2012-13. A parliamentary standing committee is considering the bill.
The bill is a pet project of Congress president Sonia Gandhi-led National Advisory Council (NAC). It promises 75 percent of rural population and 50 percent of urban households the right to 7 kg of foodgrains a person every month, at Rs.3 per kg for rice, Rs.2 per kg for wheat and Rs.1 per kg for coarse grains to the below poverty line category of people.
The general category (above poverty line) will get not less than 3 kg grain per person per month at half the minimum support price.
The bill will also provide rations or cooked meals to children under 14 years of age, pregnant women and lactating mothers and persons on the margins of society and destitutes.
The Bill has been criticised by many, even within the government such as agriculture minister Sharad Pawar, planning commission deputy chairman Montek Singh Ahluwalia and PMEAC chairman C. Rangarajan as being unsustainable to the exchequer besides requiring an increase in foodgrain procurement by the government.
It is estimated that the government will have to improve grain procurement from around 55 to 61 million tonnes.
"The cost of procuring the grains will keep rising with each hike in the minimum support price but the issue price has remained the same for many years," said a senior official of the food ministry.
"The government has to be prepared for any hike in food subsidy," he said.
Issue price is what the 6.5 crore BPL and 11.5 crore APL beneficiaries have to pay for the subsidised grains under the public distribution system.
These numbers are based on the 1993-94 poverty estimates.
Before the right to food law is implemented, the central government will identify the priority (BPL) and general category (APL) beneficiaries (after the ongoing BPL Census is over) and will decide the distribution quota for the states.