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Outlay for Anna Bhagya scheme likely to go up

9:28 AM, Monday, December 30th, 2013
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Bangalore: The Chhattisgarh government is likely to haggle with the Karnataka government over the price of rice it will supply to the State under the Anna Bhagya scheme (rice at Re one per kg for BPL families). If so, the State government will have another headache barely two weeks after the rice millers’ strike.

The Chhattisgarh government recently conveyed to the State that it will not be able to supply rice at the previous price of Rs 21.90 per kg. While it has not yet quoted the revised price, it has indicated that the price should be increased by at least Rs two per kg. In other words, this will mean the State government will have to shell out more for procuring rice to be distributed under its flagship scheme.

At present, the government has estimated that it may have to spend about Rs 4,000 crore on implementing the scheme this year. But with the increased price of rice, the budget would naturally go up, official sources said.

The State government had entered into an agreement with its Chhattisgarh counterpart to supply 1.50 lakh metric tonnes of rice at Rs 21.90 per kg. Accordingly, the Chhattisgarh government supplied the entire quantity to Karnataka as per the agreement till November 2013.

The Karnataka government, however, subsequently decided not to renew the agreement with Chhattisgarh and discontinue the purchase through the National Commodity and Derivatives Exchange Limited (NCDX). It instead planned to procure adequate quantity of the food grain rice through levy rice policy. There were allegations that traders were misusing Anna Bhagya rice, sources said.

Rice millers then began their indefinite strike on December 16, 2013, demanding that the government reduce the levy target of five lakh metric tonnes for a period up to March 2014. The government was forced to revise the target to 2.5 lakh metric tonnes . It also agreed to increase the levy procurement price from Rs 2,1600 to Rs 2,400.

Under Anna Bhagya scheme, about 2.5 lakh metric tonnes of rice are required every month. The State gets 1.77 lakh metric tonnes per month from the Food Corporation of India (FCI) as its share under the public distribution system.

The remaining about 70,000 metric tonnes have to be procured directly from various sources like Chhattisgarh and trading under the NCDX, sources said.

But as its procurement plans have gone haywire, the State government has decided to approach Chhattisgarh again for rice supply and resume NCDX trading, sources added.

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