The NITI Aayog has recently proposed a revision in the National Food Security Act (NFSA), 2013 for lowering the coverage of both rural and urban population to save up to Rs 47,229 crore annually.

National Food Security (NFS) Act

• The NFS Act, 2013 aims to provide subsidized food grains to approximately two-thirds of India’s 1.2 billion people.
• It was signed into law on 12 September 2013, retroactive to 5 July 2013.
• It converts into legal entitlements for existing food security programmes of the GoI.
• It includes the Midday Meal Scheme, Integrated Child Development Services (ICDS) scheme and the Public Distribution System (PDS).
• Further, the NFSA 2013 recognizes maternity entitlements.
• The Midday Meal Scheme and the ICDS are universal in nature whereas the PDS will reach about two-thirds of the population (75% in rural areas and 50% in urban areas).
• Pregnant women, lactating mothers, and certain categories of children are eligible for daily free cereals.

Key provisions of NFSA

• The NFSA provides a legal right to persons belonging to “eligible households” to receive foodgrains at a subsidised price.
• It includes rice at Rs 3/kg, wheat at Rs 2/kg and coarse grain at Rs 1/kg — under the Targeted Public Distribution System (TPDS).
• These are called central issue prices (CIPs).

Try this PYQ:

Q.With reference to the provisions made under the National Food Security Act, 2013, consider the following statements:

1. The families coming under the category of ‘below poverty line (BPL)’ only are eligible to receive subsidized food grains.
2. The eldest woman in a household, of age 18 years or above, shall be the head of the Household for the purpose of issuance of a ration card.
3. Pregnant women and lactating mothers are entitled to a ‘take-home ration’ of 1600 calories per day during pregnancy and for six months thereafter.

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 2 only

(c) 1 and 3 only

(d) 3 only

What has NITI Aayog asked for review?

• A revision of CIPs is one of the issues that have been discussed.
• The other issues are updating of the population covered under the NFSA, and beneficiary identification criteria.
• Under sub-section (1) of Section 3 of the Act, the term “eligible households” comprises two categories — “priority households”, and families covered by the Antyodaya Anna Yojana (AAY).
• Priority households are entitled to receive 5 kg of foodgrains per person per month, whereas AAY households are entitled to 35 kg per month at the same prices.

Provisions for review

• Under Schedule-I of the Act, these subsidised prices were fixed for “a period of three years from the date of commencement of the Act”.
• While different states began implementing the Act at different dates, the deemed date of its coming into effect is July 5, 2013, and the three-year period was therefore completed on July 5, 2016.
• However, the government has yet not revised subsidised prices.
• The government can do so under Schedule-I of the Act, after completion of the three-year period.
• To revise the prices, the government can amend Schedule-I through a notification, a copy of which has to be laid before each House of Parliament as soon as possible after it is issued.
• The revised prices cannot exceed the minimum support price for wheat and coarse grains, and the derived minimum support price for rice.

The question of coverage

• The Act has prescribed the coverage under “eligible households” — 75% of the rural population and up to 50% of the urban population.
• On the basis of Census 2011 figures and the national rural and urban coverage ratios, 81.35 crore persons are covered under NFSA currently.
• This overall figure has been divided among the states and UTs, based on the NSSO Household Consumer Expenditure Survey 2011-12.
• Section 9 of the Act deals with an update of coverage of the population under the Act.
• However, given the population increase since then, there have been demands from the states and union territories to update the list by ensuring an annual updating system under NFSA.

Propositions by NITI Aayog

• The NITI Aayog has suggested that the national rural and urban coverage ratio be reduced from the existing 75-50 to 60-40.
• If this reduction happens, the number of beneficiaries under the NFSA will drop to 71.62 crores (on the basis of the projected population in 2020).
• To make these changes in the law, the government will have to amend sub-section (2) of Section 3 of the NFSA. For this, it will require parliamentary approval.

Implications of the move

• If the national coverage ratio is revised downward, the Centre can save up to Rs 47,229 crore (as estimated by the NITI Aayog paper).
• On the other hand, if the rural-urban coverage ratio remains at 75-50, then the total number of people covered will increase from the existing 81.35 crores to 89.52 crore —an increase of 8.17 crore.
• This estimate by the NITI Aayog is based on the projected 2020 population, and, according to the paper, will result in an additional subsidy requirement of Rs 14,800 crore.

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