Sharad Pawar wary of Sonia Gandhi’s big food security plan

The National Advisory Council (NAC), led by Congress president Sonia Gandhi, may have suggested doubling food subsidies to keep an electoral promise, but the country’s food and agriculture minister, Sharad Pawar, is not amused. Pawar has expressed frustration at the NAC’s suggestion to provide subsidised food to 75% of the population.

“It (the NAC proposal) reminds me of an old AICC (All Indian Congress Committee) resolution when I was a young worker with the party. Nehru was the prime minister then. The proposal was withdrawn in 10 days,” said Pawar.

Last week, the NAC (comprising activists and experts) had recommended extending the highest level of subsidies — 80% — to nearly 40% of the country’s population. Ten per cent of the population is covered under this category at present.

The NAC had also suggested that the 50% subsidy scheme, which covers around 20% of the population, should cover 35% of it. At present, only around 6.5 crore families are eligible for subsidies of 50% or more. The new scheme would bring 18.6 crore families under this category; 75% of the population would be covered.

Pawar, whose ministry had objected to a similar draft proposal by the NAC on financial grounds earlier, pointed out that the final recommendations will tax the treasury. According to projections made by the ministry, if implemented, the NAC’s suggestion would immediately raise the subsidy burden from around Rs58,000 crore last year to Rs88,750 crore.

The figure was Rs25,000 crore four years ago.

The new calculations made by the ministry also reveal that the suggestions would require the government to suck out nearly 35-40% of the wheat and rice produced in the country. Against 43.8 million tonnes sent to the states for rationing last year, the new scheme would require 62.1 million tonnes. In addition, another 8-12 million tonnes are required for various welfare and strategic schemes, against a total national rice and wheat production of around 200 million tonnes a year.

The public distribution system in the country has been criticised for allowing corrupt government officials and distributors to divert a big chunk of the foodgrain issued to the economically weak families.

Pawar said some states like Tamil Nadu have reformed their distribution system to make them less leaky, but it was beyond his powers to force the states to do so. “There are reports of large-scale diversions in some states. But I cannot withhold the stock or set preconditions,” he said. The NAC had suggested the states to ‘de-privatise’ the ration shops to prevent diversion and substitution, without giving details.

Pawar also said he was in favour of allowing foreign companies to set up retail chains if doing so does not destroy the trading class. “I feel, as do the farmers, that it will be beneficial. Consumers will also get some advantage. But there are other players (traders) also. If I feel the other players are going to be totally destroyed then I am not going to move aggressively in that direction,” he said.

The government is currently holding inter-ministerial consultation on whether to allow foreign firms to set up retail chains and buy products directly from small industry and farmers — usually at a higher price than what traders offer.