(a) whether the Comptroller and Auditor General of India (C&AG) in its Report 2000-01 has
criticised the Centre`s policy on prices of foodgrains;
(b) if so, the details thereof; and
(c) the action taken to set right the shortcomings pointed out by the C&AG?
THE MINISTER OF STATE IN THE MINISTRY OF CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION ( SHRI U.V. KRISHNAM RAJU )
(a)&(b): The CAG in its Report for 2000-01 made certain observations on prices of
foodgrains. The main observations are the following:
(i) The price movements show a policy tilt towards producers vis-a-vis purchasers;
(ii) The inevitable increase in subsidies in the short run and in Central Issue Prices
thereafter reduced the margins between the PDS prices and the market prices which led to the
decline in offtake of foodgrains in some years;
(iii) Despite foodgrains availability in the public domain, the aggregate release of foodgrains
remained static between 1992-99;
(iv) The procurement price for wheat was higher, and it is certainly not to the advantage of
the consumer;
(v) The leakages and inefficiencies at the level of Procurement and Release Agencies and also
some other costs added at State level increase the prices for consumers as a result of which
60 to 70 per cent ration card holders did not/do not purchase rice or wheat from the fair price
shops.
(c): The Central Issue Prices (CIP) of wheat and rice are fixed by the Government mainly to
help the poorest and the disadvantaged segments of our population. As such, under the TPDS,
wheat and rice are issued to BPL families at subsidized rates. The CIPs fixed for APL families
also contain an element of subsidy. Therefore, CIPs are significantly below open market prices.
However, the economic costs of wheat and rice are kept in mind while fixing the CIPs.
The offtake of foodgrains under the TPDS has shown remarkable improvement since 2000-01.
The offtake of foodgrains under TPDS was 117.1 lakh tonnes during 2000-01, which increased to
138.3 lakh tonnes during 2001-02. The offtake of foodgrains under TPDS has already touched
100 lakh tonnes during the first seven months of the current financial year (April-October
2002-03).