Even as the much talked about National Food Security Act is yet to be implemented fully across the country, a high level committee set up by the Government to look into the matters related to FCI has recommended limiting the coverage to 40% of the population.
The food security act mandates coverage of 67% of the population including 75% in rural areas and 50% in urban areas.
The High level committee has also made several other recommendations relating to procurement of grains, imposing levies by states and the way FCI should function.
The committee felt that existing PDS system results in 40 to 50% leakages.
It also suggests that instead of physically handing over grains through PDS, cash transfer system should be brought in which would result in saving of Rs.30000 crore annually.
It has suggested that each beneficiary should be given 7 kg of grain instead of 5 kg under the Act, and cash transfers be introduced in a phased manner. It is estimated that this will reduce the foodgrain requirement under TPDS from 61.4 million tonnes to about 40 million tonnes.
The panel wants the FCI to hand over the procurement of wheat, paddy and rice to growing States such as Punjab, Haryana, Andhra Pradesh, Chhattisgarh, Madhya Pradesh and Odisha with the rider that they will not give bonuses to farmers over and above the MSP determined by the Centre.
The surplus States must procure for deficit States. The States must also contain the taxes and statutory levies at three per cent of the MSP from the current two to 14.2 per cent in Punjab. This would mean a cut in the revenues of the procuring States as well as in the income of middlemen.
The committee says that the buffer stock is double than the necessary.
There is also allegation that this report is moving and catering to a certain unhealthy purpose. It is also being said that privatization is the main intention behind this report.
Poverty in India is widespread, and a variety of methods have been proposed to measure it.
The FCI has shortage of storage facility in many areas across the country.