Under the Bill cleared at a special meeting of the Cabinet, chaired by prime minister Manmohan Singh, each person of the priority household, similar to Below Poverty Line (BPL) families under current Public Distribution System (PDS), would be supplied seven kg of rice, wheat and coarse grains per month at the rate of Rs3, Rs2 and Re1 per kg respectively
New Delhi: Paving the way for subsidised foodgrain to the poor, the government on Sunday cleared the Food Security Bill that seeks to give legal entitlement of cheaper food to over 63% of the population that will cost an additional subsidy of Rs27,663 crore, reports PTI.
Under the Bill cleared at a special meeting of the Cabinet, chaired by prime minister Manmohan Singh, each person of the priority household, similar to Below Poverty Line (BPL) families under current Public Distribution System (PDS), would be supplied seven kg of rice, wheat and coarse grains per month at the rate of Rs3, Rs2 and Re1 per kg respectively.
According to estimates, the implementation of this would result in higher food subsidy by Rs27,663 crore taking the overall figure to about Rs95,000 crore.
The Bill, considered to be the pet project of UPA chairperson Sonia Gandhi, was announced in the election manifesto of the Congress Party in 2009 general elections.
Since September 2009 the Empowered Group of Ministers (EGoM), headed by finance minister Pranab Mukherjee, has been deliberating on it.
Agriculture minister Sharad Pawar has been vocal about his criticism of the initiative due to financial burden and also about the availability of foodgrain to meet the requirement under the proposed law.
The government would require 61 million tonnes of foodgrain to provide food security as against 55 million tonnes required now under the PDS.
Food minister KV Thomas, who has met senior Cabinet minister (including those from UPA allies) last week to evolve a consensus in view of some differences voiced by Mr Pawar and also Trinamool Congress seeking more time to study the Bill.
Besides cheap foodgrain to the poor, the Bill also seeks to provide minimum 3 kg of foodgrain per month per person under general household category at rate not exceeding 50% of the Minimum Support Price.
The government has also made a special for pregnant women and lactating mothers, children, destitutes, homeless and people under starvation among others.
In rural India, up to 75% of the people will be covered, with at least 46% under priority households (which is same as below poverty line families in the existing public distribution system).
Up to 50% of people will be covered in the urban centres, with at least 28% under priority category.
Talking to reporters after the meeting, Mr Thomas said it has been decided to introduce the Bill in this session.
“It was discussed and approved unanimously. Whatever, we had proposed has been approved,” he said.
Prices of subsidised foodgrain are much lower than the rate at which these are currently supplied to poor through ration shops.
Under present PDS, 35 kg of wheat and rice per month per family is supplied to 6.52 crore BPL families at Rs4.15 and Rs5.65/kg, respectively.
General category would get at least 3 kg of grains at a rate not exceeding 50% of the minimum support price.
At present, about 11.5 crore APL families get at least 15 kg of wheat and rice per month at Rs6.10 and Rs8.30/kg, respectively.
Mr Thomas had said Saturday that the total financial liability to implement the law would be Rs3.5 lakh crore, as funds would be required to raise agriculture production, create storage space and publicity among others.
Sonia Gandhi led National Advisory Council (NAC) and an expert committee headed by Prime Minister's Economic Advisory Council (PMEAC) chairman C Rangarajan had also submitted their recommendations on the bill.
The NAC had recommended legal entitlement to subsidised foodgrain to both priority and general households, covering at least 75% population.
However, the PMEAC had opined that this was not feasible. Instead, they suggested that assured delivery of grains should be restricted to the really needy households and the coverage of the rest should be through an executive order.
The objective of the proposed law is “to provide for food and nutritional security...by ensuring access to adequate quantity of quality food at affordable prices, for people to live a life with dignity”.
Going by the stated objective, there is a provision of meals to special group such as destitutes, homeless, person living in starvation and disaster affected persons.
That apart, there is a great focus on nutritional support to women and children in the bill.
“Pregnant women and lactating mothers, besides being entitled to nutritious meals, will also receive maternity benefit at Rs1,000 per month for six months,” Mr Thomas had said, adding that children up to eighth class would get meals.
Aiming to empower women, the bill proposes to issue ration card to the eldest female member of the family.
Among the other key provisions, the bill stipulates that the Centre would reimburse in cash in case of short supply of foodgrain to the states because of fall in production on account of natural calamities such as drought and floods.
In case of non-supply of foodgrain or meals to entitled person, the concerned state would be required to provide ‘food security allowance’.
A three-tier grievance redressal mechanism would be set up to deal with issues related to delivery of entitlements.
They are—District Grievance Redressal Officer (DGRO), State Food Commission and National Food Commission.
The bill provides for penalty up to Rs5,000 to be imposed on public servants or authority by the National and State Food Commissions if found guilty of non-compliance with the relief recommended by DGRO.
“We expect the current account deficit as a percentage of the GDP to close in on the 5-percentage mark at 4.9% against an estimated 3.7% in the September quarter and 3.1% in the first quarter,” CMIE said in its monthly bulletin
Mumbai: Macro-economic research agency Centre for Monitoring Indian Economy (CMIE) has said the current account deficit (CAD) may climb to 4.9% of the gross domestic product (GDP), at $47 billion, in the December quarter, reports PTI.
“We expect the current account deficit as a percentage of the GDP to close in on the 5-percentage mark at 4.9% against an estimated 3.7% in the September quarter and 3.1% in the first quarter,” CMIE said in its monthly bulletin.
The agency said the CAD is likely to go up to $47 billion from $35.5 billion in the second quarter and attributed the sharp spike in the trade deficit to a steep fall in merchandise exports and a rise in imports.
Exports are likely to touch only $70.4 billion in the December quarter, much lower than the $80 billion peak it saw in the June quarter.
The fall in exports is on account of weakness in the global economy, primarily in Eurozone markets and the US, said the report, adding that the import bill continues to rise due to the upward spiral in crude prices and steep fall of the rupee.
After high double-digit growth in the previous months, exports rose marginally to $22.3 billion in November, while inward shipments rose to $35.9 billion, leaving a trade deficit of $14 billion.
Going forward, the agency expects the moderation in imports to be slower than that of exports. This would result in a trade deficit above $40 billion in the fourth quarter.
“For the full year, we see the trade deficit to top $163 billion. Of this, about $94 billion will be offset by the invisibles earnings, leaving a current account deficit of $69.8 billion, or 3.7% of the GDP, for the year,” the report said.
With effect from 2nd January, the daily cap on trade level incentives for futures will be increased to Rs125 crore from the existing Rs100 crore. Furthermore, in case of options, the daily cap will be revised to Rs500 crore of the notional traded value, NSE announced
Mumbai: The National Stock Exchange (NSE) will sweeten the incentives provided under its liquidity enhancement scheme (LES) for S&P 500 and Dow Jones Industrial Average (DJIA) derivatives from 2nd January next year, reports PTI.
The NSE had introduced the LES scheme for derivatives on the S&P 500 and DJIA indices from 15th September. The NSE had launched derivatives trading on these two US indices in late August. The move to improve the incentives provided under the LES is aimed at increasing trading interest in derivatives products.
With effect from 2nd January, the daily cap on trade level incentives for futures will be increased to Rs125 crore from the existing Rs100 crore. Furthermore, in case of options, the daily cap will be revised to Rs500 crore of the notional traded value.
In addition, the cash incentives payable on the traded value of futures and the premium paid on options contracts will be increased.
Over-and-above these trade level incentives, a market participant executing a buy trade in case of S&P 500 options will receive an incentive of Rs1,500 per crore, as against the existing incentive of Rs400 per crore, while a sell trade will earn an incentive of Rs4,500 per crore compared to the Rs1,700 per crore incentive fixed earlier.
In the case of futures contracts, the trade incentive for sellers of DJIA futures and S&P 500 futures will be increased to Rs2,100 from Rs1,700 per crore of the traded value.
With respect to the existing open interest level incentive structure, the cash incentive payable for maintaining open interest will be increased to Rs25 lakh per month from Rs18 lakh a month previously.
What is more, the open interest level incentive will be extended to the top ten participants, as against the existing cap restricting it to the top five participants, and will be payable on a proportionate basis.
With respect to the order level incentive structure, the existing cash incentive payable will be increased exclusively for S&P500 options by Rs3 lakh per month. Therefore, the cash incentive at the order level shall be paid from a pool of Rs21 lakh per month.
Furthermore, the existing obligation of maintaining orders on both sides in at least three calls and three puts out of the specified strikes—six out-of-the money (OTM), six in-the-money (ITM) closer to the at-the-money (ATM) and one ATM—will be reduced to two calls and two puts from January 2.
The NSE has stated that there will be no change in any other order level obligations for both futures and options.
The stock exchange will also improve the incentives for the top five client-based trading members in terms of daily volumes in DJIA and S&P 500 derivatives.
Trading members that achieve an average daily volume of at least Rs5 crore across clients in a month (excluding proprietary trading) and with average daily participation of at least 15 clients in a month will be proportionately rewarded on a monthly basis from a pool of Rs5 lakh.