The National Food Security Bill (NFSB) has been put off yet again. Reason: irreconcilable differences between the planning commission and the ministry of food (backed by the national advisory council).

The union cabinet’s reluctance to take a call on UPA II’s signature legislation underlines the lack of consensus within the government on the issue of food entitlements. The planning commission stated its objections to the draft of the bill presented for approval to the cabinet, during its meeting on Tuesday.

The planning commission’s main caveat is that the extent of the food security umbrella – 75 percent rural and 50 percent urban population (with 42 percent rural and 28 percent urban designated as “priority” households) has been included in the bill.

By making percentage coverage part of the main body of the act rather than putting it in the schedule, the government loses flexibility to revise these percentages when needed. “It is also not clear how all-India percentage would be converted to state-wise entitlements”, a planning commission note prepared on the eve of the cabinet meeting said.

The note observes that the draft bill delinks food entitlement from the poverty head count, that is, the coverage will not be confined only to below-poverty-line or BPL households. It will have a much broader scope. The issue of coverage needs to be strongly taken up in the cabinet, says the note as “including population coverage in the bill would be against the government’s stated policy of linking coverage to the outcome”.

The planning commission advises that “The bill at this stage may only mention what can be safely mentioned without creating implementation problems later”.

It further objects to the fact that quantity entitlements have again been made part of the main bill instead of being put in the schedule. This, too, will create implementation headaches for the government.

The note points out that the figure of Rs 95,000 crore is an underestimation. The food subsidy bill is likely to be in excess of Rs 1.02 lakh crore even without taking a plethora of other costs into account. Administrative, publicity, capacity building, evaluation, social audit, increased manpower and expanding storage capacity will need further outlay. The integrated child development scheme (ICDS), for instance, is projected to cost Rs 35,000 crore per annum.

It strongly recommends that the low issue prices for rice, wheat and coarse grains (Rs 3, Rs 2 and Re 1 respectively) proposed in the draft bill should be revisited. Particularly in the case of general households, “issue price should be at par with MSP” rather than 50 percent of the minimum support price (MSP) or the purchase price paid to the farmer for his produce. This additional subsidy, given the existence of a safety net in the form of a national rural employment guarantee scheme, is not necessary. “Given the need to conserve resources, these adjustments in issue prices are desirable otherwise the budget burden will keep on increasing”. Since MSPs are revised upwards every year, the food subsidy bill goes up accordingly.

In a similar vein, it suggests that the Rs 1,000 per month subsidy for pregnant and lactating women be limited to those who are not receiving other subsidies or are not government or PSU employees.

The projected outlay also does not take into account the funds required for boosting production by 25 million tonnes, estimated at Rs 1.1 lakh crore. And this whopping sum excludes the money required for irrigation, power, credit, insurance, fertilizer, pesticide, etc.

The note points out that the Ministry of Agriculture will have to clarify whether the projected procurement of 60 million tonnes of foodgrains required to implement the NFSB can be sustained year after year.

The planning commission observes that it had earlier sent its objections to the DFPD in writing, but none of them have been agreed to, necessitating a strong stand in the cabinet.