Budget: Food Security Bill on ice

The ambitious legislation on food security is unlikely in the next one year. It is believed that the finance ministry is not making any allocation for food security in the forthcoming Budget.

The Food Security Bill will cost the exchequer a whopping Rs 62,000 crore when fully implemented.

“While there is pressure from the Prime Minister’s Office (PMO) to bring this legislation in the current year, the financial position of the government does not leave any scope for such a massive scheme to be introduced, at least this year,” a source in the government said.

Also, the government is in a dilemma over the number of poor in the country after the Suresh Tendulkar report increased the below poverty line population by 10%. “The new numbers will require extra funds. The Bill will be introduced in Parliament for sure, but we should not expect any allocation in the upcoming Budget,” the source added.

The government has formed an empowered group of ministers, headed by finance minister Pranab Mukherjee, to discuss the Draft
Food Security Bill. Among the various proposals made so far, steps such as merging all other food schemes (those having higher allocations for the targeted population) into the Food Security Act, and omitting above poverty line people from the benefits of the schemes have been proposed.

This indicates the government’s lack of preparedness to introduce such a high resource consuming scheme in a year when the projected fiscal deficit is at 6.8%.

In the pre-budget meetings with the PMO and the Planning Commission, the finance ministry had sought to hike the gross budgetary support (GBS) for next year by no more than 11%.

But Prime Minister Manmohan Singh convinced finance minister Pranab Mukherjee to increase the GBS by at least 15%, so that social sector flagship schemes such as Sarva Shiksha Abhiyan and the Integrated Child Development Scheme do not face any resource crunch.

The Congress party, the largest constituent of the current UPA coalition, had promised  the Food Security Act in its manifesto for the  Lok Sabha election in 2009 to promote its aam aadmi image.

While the government wanted to introduce the Food Security Bill in
the Monsoon session of Parliament, a severe drought in the country stopped the government from moving in that direction.