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Maharashtra cuts food subsidy for 1.7 cr people #WTFnews

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Written by Sandeep A Ashar | Mumbai | Posted: January 18, 2015

Even as Prime Minister Narendra Modi announced Friday that his government won’t cut subsidies for the poor, it has now come to light that the BJP-Shiv Sena government in Maharashtra has already silently discontinued the food subsidy for nearly 2 crore people in the state. According to sources, the Devendra Fadnavis government has decided to discontinue supply of subsidised food grains to 1.77 crore people who were previously covered under the Public Distribution System (PDS).

In December 2013, in the run-up to the 2014 Lok Sabha and Vidhan Sabha polls in the state, the erstwhile Congress-NCP government in Maharashtra had decided to continue with PDS benefits for 1.77 crore people who were left out of the Centre-sponsored Food Security Act. Wary of the political fallout on discontinuing food subsidy to such a large population, the previous regime had overlooked a stern warning from the state’s finance department and decided to bear the cost of these additional beneficiaries from the state exchequer.

After the FSA kicked in on January 31, 2014, the state sustained an additional burden of Rs 117 crore every month for the additional beneficiaries of PDS benefits, senior government officials said.

While there are 8.77 crore PDS beneficiaries in the state, the Centre had sanctioned the Food Security Scheme for only 7 crore people in Maharashtra. The previous regime had extended the subsidy under PDS to the additional 1.77 crore people till October 31, 2014, initially. Fadnavis, when contacted, confirmed that his government had decided to do away with this additional subsidy.

The people for whom the subsidy has been withdrawn include those in the above the poverty line (APL) families earning over Rs 59,000 per annum in urban areas and Rs 44,000 per annum in rural belts. APL category includes families whose annual income is up to Rs 1 lakh. Of the 8.77 crore PDS beneficiaries, 5.77 crore fell under the APL, another 1 crore were under Antodaya, and 2 crore belonged to below the poverty line (BPL) category. Ironically, the decision to discontinue the subsidy appears to have been taken covertly to avoid a backlash. Sources confirmed that supply of subsidised foodgrains to these 1.77 crore people has been discontinued since November 1, without the government making any formal announcement.

In November last year, sources said, the state’s Food and Civil Supplies Department had written to the CMO in this regard. The CMO is yet to revert on the file.

The Fadnavis government had earlier rolled back power subsidy extended by the previous regime. With mounting debt on the state exchequer, the state’s financial health is worsening, forcing the new government to even impose steep cuts in spend on development works.

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