The Telegraph
Since 1st March, 1999
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No free lunches for Jaya’s tax payers

Chennai, Aug. 30: Come September 1, Jayalalithaa will deprive a section of her subjects of a privilege they have enjoyed virtually since Independence. The government is imposing an income criterion for availing of the facilities of the public distribution system.

The scheme that is receiving finishing touches now will “disentitle” persons in the state who are obliged to pay income-tax and sales tax and those who earn more than Rs 5,000 every month from drawing any subsidised food article from the public distribution system.

But they can retain the ration card as a key document to establish identity and residential address. When people who have been pushed out of the ambit of the PDS come to renew their cards, they will be stamped “H” for honorary, indicating that they are ineligible.

Again, come September 1, the section of Jayalalithaa’s subjects who can avail of the PDS facility will receive the 20 kg of rice they are entitled to every month at a reduced rate of Rs 3.50 per kg — a sop for the poor the chief minister announced in her Independence Day speech with an eye on polls and the prospect of another drought looming on the horizon.

Sources explained that the income clause will offset the impact of the price slash that was expected to considerably increase the off-take of rice from ration shops and, in turn, push up the food subsidy bill. They added that the budgeted food subsidy, standing at Rs 600 crore this year, may at best go up by another Rs 100 crore due to the radical restructuring.

The subsidy covers costs incurred in supplying foodgrain at lower than market rate and the expenses involved in providing price support to farmers through a minimum price support programme to procure the foodgrain.

The government has also decided to shift 5.61 of the 8 lakh family cardholders from among the poor to the Centre’s Antodaya Anna Yojana, the sources added.

Under the scheme launched on December 25, 2000, the poorest of the poor can receive foodgrain at a highly subsidised rate of Rs 2 per kg for wheat and Rs 3 per kg for rice.

With the income clause and the shift to the central scheme coming into effect, the government will not only reduce the status of the bulk of ration cardholders to the H category, but also shrink the size of the state PDS.

The public distribution system with a network of 4.74 lakh fair price shops is operated under the joint responsibility of the central and state governments.

A system of pink cards — for those who needed the rice (largely the poor and lower middle class families) — and yellow cards — that enables one to draw either 3 kg of sugar of 5 litres of kerosene per month in lieu of rice — is in force in Tamil Nadu. It is an attempt to rationalise the PDS system after the state failed to implement the Centre’s targeted PDS.

The Centre had introduced the targeted PDS in June 1997 with a two-tier subsidised pricing structure for the BPL (below the poverty line) and APL (above the poverty line) families.

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