Mar 12, 2020
The food ministry has asked the centre for an additional subsidy of Rs. 13,000 crore to help states pay farmers for food grains procured by states for public distribution.
The Centre had allocated a subsidy of Rs. 33,000 crore under DCP scheme to states for funding their procurement exercise in 2019-20 but states like Andhra Pradesh, Kerala, Assam and Odisha have asked for additional funds to pay their farmers
Food secretary Ravi Kant has written to the finance secretary for this extra allocation to meet the procurement cost incurred by state governments.
States purchase grain under the decentralised procurement scheme (DCP). Under the Food Security Act, the Centre procures grain either via state-run Food Corporation of India (FCI) or pays states for direct purchase, store and distribution.
The reason for this demand is that if Rs. 13,000 crore will be added to the already allocated Rs 37,000 crore under DCP for states, there will be sufficient funds to run the operations in the next year also.
Under DCP scheme, the designated states procure, store and issue food grains under targeted public distribution system and other welfare schemes.