The Hindu : Tamil Nadu News : Heavy receipt of applications will heighten subsidy burden

Online edition of India's National Newspaper
Monday, Sep 13, 2004

Tamil Nadu

Tamil Nadu

Heavy receipt of applications will heighten subsidy burden

By S. Vydhianathan

CHENNAI, SEPT. 12. Receipt of too many applications for new ration cards has made it difficult for the administration to issue the cards by September as announced by the Government.

In June, the Government announced that those who did not have ration cards can apply for the same before the month-end and the cards would be issued by September after processing and verification.

The Government, according to official sources, never expected so many applications. They expected about 10 lakh applications. But they received four or five times more. Now there are about 152.55 lakh cards, including 129. 20 lakh rice, kerosene and sugar cards, 12.47 lakh kerosene cards and 10.63 lakh sugar cards.

The sources said the population of the State as per ration cards was twice the actual population. Even those who had cards applied for new ones, this time with photos of their family members. One person submitted four applications with the same photos but with different residential addresses. There were cases of different persons applying from the same address. On enquiry they said that they belonged to different families but lived in the same house in different portions. There were also cases of applicants saying that they got married and wanted ration cards in their name. Even those who belonged to the upper middle class applied for cards, not for their own use but for gifting to their servant maids.

The main reason for so many applications, the sources said, was the subsidised supply of rice. Nowhere in the country was rice being supplied at Rs 3.50 kg. On an average, the Government was providing a subsidy of Rs. 1200 per card per annum for rice alone. The subsidy component would be higher if the supply of sugar and kerosene was taken into account.

The monthly requirement of rice for public distribution would increase steeply after the issue of new cards. On an average the monthly offtake of rice at the PDS is two lakh tonnes against the Central allotment of 3.05 lakh tonnes under above poverty line (APL) category; 1.45 lakh tonnes under the below the poverty line (BPL) category; 25,000 tonnes under the Antoyodaya Yojana scheme and 20,000 tonnes under various welfare schemes.

Now the State is not lifting rice under the APL category, as the allotment under other categories is sufficient to meet the demand. If the new cards are distributed the State has to purchase APL rice, which will increase the subsidy burden.

Offtake will increase

While in the case of rice there is an avenue to lift more rice from the APL quota, in the case of kerosene there is no such scope. The present allotment is 58,400 kilo litres, which is based on liquid petroleum gas connections in the State. But many families who have LPG connections are availing themselves of the kerosene quota. After the issue of new cards, the Centre has to increase the kerosene quota substantially for the administration to be able to meet the demand.

It is the same case with sugar. The allotment is 10,820 tonnes per month. Till a few months ago, the offtake was less, as the open market price was only marginally higher than that of the ration variety. But now the offtake has increased considerably following an increase in the open market price. To meet the demand, the State is purchasing sugar in the open market. This offtake will also increase after the issue of new cards.

It would be a challenge for the Government to find ways to manage the subsidy burden, the sources said.

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