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CACP wants direct cash plan for food, fertiliser subsidies

The Commission for Agricultural Costs and Prices urged the finance ministry to adopt direct cash transfer to intended beneficiaries for rationalising food and fertiliser subsidies, adding the subsidy bill may soar to R2,00,000 crore in the next fiscal.

The Commission for Agricultural Costs and Prices (CACP) on Wednesday urged the finance ministry to adopt direct cash transfer to intended beneficiaries for rationalising food and fertiliser subsidies, adding the subsidy bill may soar to R2,00,000 crore in the next fiscal.

The budget allocation for food and fertiliser subsidies was R1,36,000 crore in the 2012-13 fiscal. The figure would rise in the revised budget estimate.

In a pre-budget meeting with finance minister P Chidambaram, CACP chairman Ashok Gulati also sought a stable export policy for farm and food items. Gulati emphasized on the need to promote palm oil plantation on a large scale to trim vegetable oil imports, which hit a record 10 million tonnes worth R60,000 crore in the last fiscal. India, the world’s biggest vegetable oil buyer, imports more than half of its annual requirement to tide over a domestic shortage.

Higher farm exports and a reduction in edible oil purchases would help the Centre to curb current account deficit (CAD), which hit a record 5.4% of the country’s gross domestic product (GDP) in September.

“Rising CAD is the biggest problem that the government faces. So, we have pitched for rationalisation of food and fertiliser subsidies,” Gulati said after the meeting. He said around 40% food items distributed through ration shops get diverted and the government can save R50,000 crore by plugging the leakages through conditional cash transfer.

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First published on: 03-01-2013 at 01:13 IST
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