New Delhi: Expressing concern over the ordinance on food security, industry body FICCI Thursday said it comes at a time when the country is trying hard to get back on the path of fiscal consolidation.
"While there is no denying the fact that right to food and attaining proper nutrition should be the basic provision for every citizen in the country, the recent announcement seems a little premature and the country is yet not fully prepared to roll out such a program," FICCI Secretary General A Didar Singh said.
The chamber said that the actual implementation of the scheme would be marred by challenges, besides questioning the fiscal sustainability of the food programme. It is expected to cost the exchequer about Rs 1,25,000 crore annually which would substantially increase the fiscal cost, it said.
"One of the biggest issues that comes to fore is the access and it is quite surprising that the government is willing to fall on the old Public Distribution System (PDS) to allocate food grains under the Bill. The PDS has not been streamlined over the years and remains plagued with inefficiencies," Singh said.
FICCI said that as 75 percent of the rural population would be eligible for food grains under National Food Security Bill (NFSB), most farmers would conveniently sell all grains at Minimum Support Price (MSP) and again come to the government for their consumption. This might result in government procurement increasing substantially and start off chain reaction, i.E., more procurement, more storage and more losses.
Yesterday, government decided to come out with an ordinance to give nation's two-third population the right to 5 kgs of foodgrain every month at highly subsidised rates of Rs 1-3 per kg. The Ordinance is being promulgated just weeks before the scheduled Monsoon session of Parliament. Even after the Ordinance, the Bill will have to be approved by both the Lok Sabha and the Rajya Sabha.
Meanwhile, apex traders' body CAIT termed the government's decision to bring an ordinance on food security as an "election gimmick" and said it will put pressure on the exchequer.
"Such a decision is in contravention of the policy of the government to curtail subsidies. The Rs 1,25,000 crore government support for this will put pressure on the exchequer and government's expenditure may overshoot estimates," Confederation of All India Traders (CAIT) Secretary General Praveen Khandelwal said.