To curb rising bills beneath the meals subsidy head, the Union authorities has requested grain-surplus states to provoke measures together with limiting statutory prices reminiscent of mandi charges, rural improvement cess and different procurement bills to 2% or much less on the minimal assist value (MSP) supplied to farmers. It additionally requested states to comply with an open tendering course of to chop prices of short-term loans and transfer paddy shares from procurement factors on to mills.
Currently, Punjab and Haryana, which contribute considerably to the central pool of grain shares, impose increased levies of 6% and 4%, respectively on MSP, reminiscent of mandi payment and rural improvement cess, in addition to arthiya or fee agent prices of `46 per quintal of grain procured by companies from farmers.
Other states, which contribute considerably to the federal government’s rice and wheat procurement drive reminiscent of Uttar Pradesh, Rajasthan, Madhya Pradesh, Andhra Pradesh, Chhattisgarh and Odisha, have levies within the vary of 1.6% to 2.7% on MSP.
Sources instructed FE that increased levies imposed on MSP operations push up the Centre’s meals subsidy invoice whereas including to their very own revenues.
For rice and wheat procurement from farmers, the Food Corporation of India (FCI) paid greater than `11,300 crore to states as levies within the respective 2020-21 (rice) and 2021-22 (wheat) seasons, of which Punjab and Haryana garnered greater than 61%.
The Centre has made a number of makes an attempt to rationalise levies imposed on MSP operations, nonetheless there has not been a lot progress on that entrance.
Higher taxes and different statutory levies imposed by meals grain-procuring states additionally distort the market, just about discourage personal sector participation in grain buy, and hit the processing and value-addition trade, in accordance with many specialists.
The meals ministry has additionally urged the state governments to drift tenders for getting short-term money credit score loans (CCLs) to get a decrease rate of interest. Sources mentioned that the FCI within the present fiscal has availed short-term loans at an rate of interest within the vary of three.85% to five.2% every year.
The meals ministry has additionally requested states to make sure motion of paddy from procurement centres on to mills, in order that transportation of paddy to godowns may very well be prevented. States have been requested to go for reverse e-bidding on the Government e Marketplace (GeM) for acquiring aggressive charges for transportation prices, outdated gunny baggage, and so forth.
“We aim at reducing expenditure on each step of grains handling, which would result in reduction in food subsidy expenses,” an official mentioned.
The central concern costs of Rs 3, Rs 2 and Rs 1 for a kg of rice, wheat and coarse grains, beneath the National Food Security Act (NFSA) haven’t been revised since 2013. On the opposite hand, the FCI’s financial value (MSP to farmers, storage, transportation and different prices) of rice and wheat for 2022-23 is 36.70 and 25.88 per kg, respectively.
For 2022-23, central authorities has allotted Rs 2.06 trillion for meals subsidy bills, which excludes extra bills of Rs 80,000 crore envisaged following the extension of the Pradhan Mantri Garib Kalyan Anna Yojana until September 30.
The FCI procures and distributes greater than 60 million tonne (mt) of wheat and rice yearly. The company manages procurement, storage and transportation of rice and wheat to states for distribution, primarily for the NFSA and different welfare schemes.
Source: www.financialexpress.com”