Centre cuts wheat allocation to 10 states under NFSA

Days after it cut the wheat allocation under the Pradhan Mantri Garib Kalyan Anna Yojana in the wake of grain’s dwindling availability due to lower opening stock, sluggish procurement and aggressive buying by private traders, the Centre on Saturday announced cut in the wheat allocation of 10 states under the National Food Security Act, 2013. However, these states have been allocated additional quantity of rice that is equal to the cut in their wheat allocation.

Addressing a press conference on Saturday, Food Secretary Sudhanshu Pandey said that after consulting with the states, the Centre has reallocated some quantities by changing ratios of wheat and rice. For example, states getting wheat and rice in the ratio of 60:40 will now get it in the ratio of 40:60, he said.

Similarly, 75:25 ratio of wheat and rice has been made 60:40, Pandey said, adding that states where rice allocation has been zero, will continue to get wheat. For all small states, NE states and special category states, allocation has not been changed, he said.

Meanwhile, in a communication to states, the Union Food Ministry said, “To ensure management of foodgrain stocks as per norms, to position rice stock for distribution of fortified rice, ease the pressure on the logistics and after due consultations, it has been decided to revise the NFSA allocation of rice and wheat under AAY & PHH category in r/o 10 States/ UTs i.e. Bihar, Jharkhand, Odisha, West Bengal, Delhi, UP, Gujarat, Maharashtra, Madhya Pradesh and Tamil Nadu and under tide over category in r/o 3 states i.e. Uttarakhand, Kerala and Tamil Nadu for the remaining 10 months of FY 2022-23 i.e. June, 2022 to March, 2023…”

The 10 states of which wheat allocation has been revised downward under the NFSA are: Bihar, Jharkhand, Odisha, West Bengal, Delhi, Uttar Pradesh, Gujarat, Maharashtra, Madhya Pradesh and Tamil Nadu and these accounts about 67 per cent (or 55.14 crore) of 81.35-crore beneficiaries covered under the NFSA. After the revision, their combined monthly wheat allocation would come down to 9.39-lakh metric tonnes from their current allocation of 15.36-lakh tonnes — a drop of 5.97-lakh metric tonnes. However, these states will be provided additional rice that will be equal to cut in their wheat allocations.

Besides, tied over allocation of wheat for three states — Uttarakhand, Kerala and Tamil Nadu — has been cut. The combined current monthly tied over wheat allocation of these states is about 1.13-lakh metric tonnes. However, after the revision, it would become nil.
The NFSA provides that “in case any state/UT’s allocation under NFSA is lower than their current allocation, it will be protected up to the level of average off-take under erstwhile normal TPDS during 2010-11 to 2012-13, at prices to be determined by the Centre”. This additional quantity of foodgrains is called the tide over allocation.

“The validity period for lifting of the revised foodgrains for June 2022 will be up to 30 days from the date of issue of this letter. The validity period for rest of the months (July 2022-March 2023) will be up to last date of the month preceding the allocation month,” the Ministry said.

“If any quantity of wheat of the existing allocation is already lifted by states, adjustment may be done for the respective quantity during the remaining period of the year,” it said.

“There will be no change in cost sharing on account of such distribution, including food subsidy, intra-state transportation and dealer’s margin/additional dealers margin, it will continue as per current sharing basis,” it added. According to the Food Ministry, the move is expected to save 61 LMT wheat over the remaining10 months of the current financial year.

On May 4, the Centre had announced a cut in wheat allocation under the PMGKAY for the remaining five months till September 2022. That cut is estimated to save 55-lakh metric tonnes of wheat till September 2022. However, an equal quantity of rice has been allocated to
the states under the PMGKAY.

The Centre’s move comes at a time when there has been a sudden spike in wheat and atta prices amid rising demand and lower production and public procurement. According to the government, the opening public stock wheat as on April 1 stood at 190 LMT. A quantity of 195 LMT of wheat is expected to be procured during the current rabi season. According to the ministry, 180 LMT wheat has been procured till May 13 during the current rabi season.

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