New Delhi, Mar 25 (): Wheat exports loss is pegged at Rs 1700 crore when Finance Ministry has added Rs 1.25 lakh crore for food subsidy bill.
Hundred tons of wheat are exported below the subsidized price it was selling as international prices are lower than this. Lack of storage space and next season procurement coming in, the UPA ministry decided to adopt this policy. The Government’s cost includes storage cost and transportation as well as procurement price to farmers.
The export of wheat has been extended till June 2013 to make way for bulk sale as it has been running out of storage space and the new procurement season is looming ahead. In the first export consignment, the Cabinet allowed export of 45 lakh tonnes of wheat.
In the second batch, it has earmarked 55 lakh tonnes. The total subsidy loss on export of the first consignment was Rs 1300 crore from 45 lakh tonnes. The second export loss was reduced as the government decided to invite tenders from private companies. The loss of second export was reduced to Rs 400 crore.
In June 2012, the exports were through state trading companies. The State-owned companies booked losses as it charged for transportation and storage for its procurement cost. The second export was given to private sector companies to export its wheat, condition being that the consignment should be picked up directly from FCI godowns at their own cost. This has however, resulted in reduction of nearly a thousand crore for the same quantity of export.
The Government’s subsidy on food grains is Rs 85,000 crore and for Food Security, it needs Rs 1.25 lakh crore. To raise this, it decided to cut subsidy of Rs 96,000 crore on oil and gas. This fiscal management is said to be the game changer that UPA chairperson Sonia Gandhi has pushed and Chidambaram bending backwards to fulfil it as this with direct cash credit for MRNEG would bring cheer to rural countryside.