Naidu draws flak on PDS rice price

By R. J. Rajendra Prasad

HYDERABAD, APRIL 13. The Andhra Pradesh Government's decision to increase the price of subsidised rice from Rs. 3.50 a kg to Rs. 5.50 has been criticised by the Opposition parties. A delegation of Left parties has submitted a memorandum to the Governor, Dr. C. Rangarajan, opposing the hike.

The Chief Minister, Mr. N. Chandrababu Naidu, has constituted a panel of experts to advise the Government on financial matters. Interestingly, Mr. Jairam Ramesh, of the Economics cell of the All India Congress(I) Committee, is a member of the panel. The other members are Mr. Ashok Lahiri, of the National Institute of Public Finance, Ms. Isher Ahluwalia, Director of the Centre for Policy Studies in New Delhi, Ms. Ila Bhat, Mr. Ashok Gulati and two from Andhra Pradesh, Mr. B.P.R. Vittal, who was a member of the Tenth Finance Commission, and Mr. T. L. Shankar, Principal of the Administrative Staff College of India.

The Rs. 2 a kg. rice scheme has become synonymous with the TDP ever since N. T. Rama Rao made the promise when he launched the Party in 1982. At that time, the subsidy a kg (the difference between the issue price of the Food Corporation of India (FCI) and the actual sale price) was only 30 paise. Today, it is Rs. 7. The fact that the State Government spends Rs. 1,066 crores on rice subsidy is held against it by economists who are of the view that the money should have been spent on primary health and primary education and to create infrastructure.

Another criticism against the scheme is that it reaches 81 per cent of the population, instead of the 22 per cent living below the poverty line.

The Planning Commission's Modified Experts Group has said that only 22.19 per cent of the population is below the poverty line in the State. One would have expected the State Government to rejoice at the steep fall in poverty levels, but it has demanded that the Centre revise the percentage upwards because the State would lose Rs. 200 crores in centrally-sponsored welfare schemes. Former Finance Secretaries, Mr. K. Madhava Rao and Mr. D. Subba Rao, have questioned the method adopted by the Group.

Mr. Naidu said yesterday that the rice scheme was ``sacred'' to the TDP but it had no choice except to pass on to the consumer the additional burden imposed by the Centre's decision to enhance the issue price. Some Ministers suggested enhancing the rice price to Rs. 6 a kg, so that the Government could get another Rs. 100 crores to absorb the subsidy of Rs. 1,066 crores a year on the scheme.

The Government can consider a differential system of subsidy, by dividing the poor into two categories. Since there is opposition to any move to weed out bogus cards, the Government can identify the ``poorest of the poor'', mainly the 20 lakh families belonging to SC and ST communities and give them rice, toor dal and tamarind at subsidised rates. Another 10 to 20 lakh families living in urban slums can be selected on the basis of enumeration of their annual income and given the same facility. The remaining 60 lakh families with ``white'' cards can be given a lower subsidy.

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Section  : Regional
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