Govt cuts grain subsidies to poor
NEW DELHI (Reuters) - India on Friday cut the amount of subsidised grain supplied to the poor and marginally raised prices at which it is sold to them, a step taken, analysts said, due to falling stocks at food procurement agencies.
The government’s communist allies denounced the move.
For families classed as living above the poverty line the monthly supply of wheat and rice has been reduced to 20 kg from 35, while for those below the poverty line the amount has come down to 30 kg from 35.
India’s last estimate in 1999-2000 put about 26 percent of the one-billion-plus population below the official poverty line of 2,100-2,400 calories a day.
The government said it took the step to ensure food subsidies were targeted at poor households and to prevent grain supplied through the scheme being diverted to the open market.
But analysts said the Congress Party-led coalition made the decision because of declining wheat and rice stocks.
“The government is forced to take this measure because of tightening of stocks of wheat and rice with the state procurement agencies,” said a Mumbai-based analyst, who declined to be named.
The Communist Party of India (Marxist), the largest of the leftist parties whose support is crucial to the government, said it was shocking that families living below the poverty line would get 5 kg less in food grain a month.
“This will adversely affect hundreds of millions of people at a time when calorie consumption is already declining and nutritional deficiencies are on the increase especially among the poor,” the party said in a statement.
Trade officials say without the cuts the government would be left with about 500,000 tonnes of wheat stocks on April 1, much lower than the normal requirement of four million tonnes.
Traders have been expecting India, a wheat exporter in recent years, to import wheat for the first time in six years because of lower stocks with procurement agencies.
But government officials say there is no need to import wheat because stocks are sufficient and prices stable.