constituted - of Planning Commission

The Group was informed that FCI has stated that it is not possible to make anestimate at this stage as procurement and offtake depend on several factorswhich cannot be predicted for the long term and, further, the exact impact of theproposed Food Security Bill on offtake quantity is yet to be ascertained. Also,the major components of Food Subsidy are linked to decisions on MSP & CIPwhich are currently unknown for the Twelfth Plan. However, as per estimates ofMinistry of Food, if the impact of the Food Security Act is not taken intoaccount, the subsidy projections for the Twelfth Plan period will add upto`5,49,814 crore with the figure for 2011-12 being reassessed by Ministry ofFood at `80,587 crore. These are based on the following assumptions:-(a) Procurement and offtake will remain at current levels(b) Effect of additional allocations made during the current year hasnot been taken into account but additional allocation of 50 lakhtonnes of food grains at BPL rate taken into account(c) No abnormal increase in MSP of paddy/rice from 2012-13 orincrease in CIP.The Group, however, noted that the Food Security Bill is likely to be introducedsoon and it would therefore be necessary to include the requirements on accountof the Food Security Act in the projections for the Twelfth Plan period. Basedon current estimates, it is expected that the average annual food subsidy billduring the Twelfth Plan period would be around `80,000 crore. This may varyfor individual years depending on when the Bill is passed and the per cent ofofftake in each year. For the purpose of making projections, however, theexpenditure on food subsidy has been kept at `80,000 crore in each of the yearsof the Twelfth Plan period.Fertilizer Subsidy: Expenditure on Fertilizer Subsidy increased during theEleventh Plan by 53.89 per cent from `32490 crore in 2007-08 to `49998 crorein 2011-12.Working Group Report on Centre’s Financial ResourcesPage-38