Context: Recently, the NITI Aayog circulated a discussion paper on a proposed revision in the National Food Security Act (NFSA), 2013.
About the National Food Security Act (NFSA), 2013
- Provides a legal right: To persons belonging to eligible households to receive food grains at subsidised price - rice at Rs 3/kg, wheat at Rs 2/kg and coarse grain at Rs 1/kg, under the Targeted Public Distribution System (TPDS).
- These are called central issue prices (CIPs).
- Eligible households: Under the Act, the term eligible households comprises two categories - priority households and families covered by the Antyodaya Anna Yojana (AAY).
- Priority households are entitled to receive 5 kg of foodgrains per person per month, whereas AAY households are entitled to 35 kg per month at the same prices.
- The Act has prescribed the coverage of 75% of the rural population and up to 50% of the urban population, which covers 81.35 crore persons (Census 2011) on all India basis.
Need for revision
- A revision of CIPs: Under the Act, these subsidised prices were fixed for a period of three years from the date of commencement of the Act. However, the government has yet not revised the subsidised prices.
- Even the Economic Survey of 2020-21 had recommended a revision in the CIPs.
Updating the population coverage and beneficiary identification criteria: The Act contains a provision which deals with an update of coverage of population.
- The percentage coverage under the TPDS in rural and urban areas for each State shall be determined by the Central Government on the basis of the population estimates as per the census.
- The number of beneficiaries was frozen in 2013, however, given the population increase, there have been demands from the states and union territories to update the list.
The NITI Aayog has suggested that the national rural and urban coverage ratio be reduced from the existing 75-50 to 60-40. This will require parliamentary approval.
The implication for the Centre and the states
- Rationalisation of funds: However, the move to revise the national coverage ratio downward may be opposed by some of the states, the Centre can save up to Rs 47,229 crore ( NITI Aayog).
- If the rural-urban coverage ratio remains the same: Then the total number of people covered will increase, that will result in an additional subsidy requirement of Rs 14,800 crore.