The economy will not be impacted adversely by the food security programme which will be implemented in the next 12 months, Food Minister KV Thomas said today seeking to allay fears that its cost will take a toll on government finances.
"We brought food security ordinance, and the same has been passed as a bill in the Lok Sabha. Nothing has changed in the bill to affect the economy," Thomas told PTI.
Government has dismissed fears of any sharp spike in fiscal deficit this year because of the food security programme that will be implemented once the legislation is through in Parliament.
An estimated Rs1,27,000 crore for implementing the scheme is for a full financial year and it will be much lower in the current fiscal as five months have already passed.
A sum of Rs90,000 crore has already been provided for in the current year's budget as food subsidy, including Rs10,000 crore for the new programme, and it would not cross this level at any rate.
The additional subsidy of Rs10,000 crore would be required when states implement this programme in the next one year, he said.
"However, the subsidy can come down if 25-30 per cent leakages are plugged by bringing reforms in PDS," Thomas said.
The landmark Food Security Bill which seeks to provide cheap foodgrains to 82 crore people in the country was passed by the Lok Sabha on August 26.
Referring to the rupee decline, the Food Minister said: "The rupee fall has some impact on the economy but not food security programme, which has to be implemented in next 12 months."
Economists and analysts have expressed the fear that the huge subsidy required for the ambitious food security programme will increase the fiscal burden.
The government has 73 million tonnes of foodgrains in its godowns as against requirement of 62 million tonnes for the new programme, Thomas said, adding that more foodgrains would come with new harvest this year.