Chapter 8: In conclusion: rural households of Assam require continuous food based interventions provides a commentary on the role and significance of food based welfare
4.6 GEOGRAPHICAL TARGETING AND STATE ISSUE PRICE IN ASSAM The department of Food Civil Supply and Consumer Affairs, GoA fixes the transportation
charge and profit margin for the GPSS and FPSs over CIP and based on that SIP is fixed for BPL and APL rice. The transportation charge was revised three times since January 1987 and profit margin was revised two times. However Assam follows a unique method of
fixation of SIP based on geographical distance between GPSS and FPSs.SIP for rice in Assam is fixed by dividing the districts into Plain area, Riverine area and Hill area and considering the distance between GPSS and FPSs. The distance between GPSS and FPSs is divided into categories of 0-5km, above 5km-10km, above 10km-30km, above 30km-50km, and above 50km. However, the norm of keeping SIP of BPL rice within limit of Rs 0.50 above the CIP of BPL rice has never been followed in the state.
The state government keeps the SIP always open and never gives strict instruction to the GPSS and FPSS to charge a fix SIP from the consumer. Thus the distributing agencies add the rising fuel price in transportation costs and push the burden to the consumers. Such multiple state issue prices create information distortions among the beneficiary households as well as welfare losses (see for example Bedamatta, 2016 for geographical targeting and welfare losses in Odisha). However it needs mention here that while Odisha‘s geographical targeting during the period of 1990s and early 2000s was based only on tribal and drought prone area programme districts, in Assam geographical targeting is more complex as there is a distance slab as well as a geographical location categorization based on plain, riverine and hill areas.
Table 4.5 shows the SIP for BPL and APL rice since the introduction of TPDS in the state.
As the SIP is fixed on the basis of geographical categorisation and distance, the SIP may vary from place to place within a district. The SIP for the above mentioned type of households are above the CIP which shows that GoA has not provided any state subsidy to these households. SIP of rice for AAY households was fixed equivalent to CIP by giving an amount of Rs. 0.30 per kg as a state government transport subsidy. It is disconcerting to know that there are 15 different SIP for BPL and APL rice in the state.
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Table 4.5 State Issue Price (per kg) for BPL and APL rice in 1995 and 2008 Distance slab
(in km)
SIP _ BPL rice, 1995
SIP _ BPL rice , 2008
SIP _ APL rice , 1995
SIP _ APL rice, 2008
Plain Riverine Hill Plain Riverine Hill Plain Riverine Hill Plain Riverine Hill 0 to 5 6.31 6.32 6.37 6.51 6.52 6.62 8.96 8.97 9.02 9 9.02 9.11 Above 5 to 10 6.33 6.34 6.38 6.54 6.56 6.63 8.98 8.99 9.022 9 9.05 9.13 Above 10 to 30 6.35 6.36 6.4 6.58 6.6 6.68 8.99 9. 00 9.05 9.1 9.09 9.18 Above 30 to 50 6.37 6.38 6.42 6.61 6.64 6.71 9.01 9.03 9.06 9.1 9.14 9.21 Above 50 6.38 6.4 6.43 6.64 6.68 6.74 9.02 9.05 9.08 9.1 9.18 9.23
Source: Author‘s calculation after accounting for profit margin of the fair price shop based on transportation costs.
Table 4.6 shows the CIP and SIP for common rice provided to the BPL households in the state from 1997 to 2015. The upper slot of the table shows the SIP fixed for the BPL common rice from 1995 to 2008. It is clear that CIP for BPL common rice has been changed for 3 times from 1997 to 2001 and remained fixed till 2013-2014. The CIP for BPL common rice was fixed at Rs3.50 per kg from December 1997 to March 2000. From April 2000 to July 2000 it was Rs5.90 per kg. From July 2001 to 2013-2014 it was fixed at Rs 5.65 per kg. On the other hand, state government has fixed 15 different SIP on the basis of geographical location and distance. For plain areas, SIP ranges from Rs. 6.31 per kg to Rs6.38 per kg, for riverine areas Rs6.32 to Rs6.40 and for hill areas ranges between Rs 6.37 to Rs 6.43. This shows that SIP for BPL common rice has been higher than that of CIP for BPL common rice in the state, which implies that there is no state specific subsidy provided to the BPL households in the state over CIP. The lower slot of the table shows the revised SIP rate of BPL common rice from 2008 to till 2015 by following the same geographical categorization.
Table 4.6State Issue Price (SIP)/Central Issue Price(CIP) for BPL common rice in Assam, 1995 to 2008
Distance slab (in km) SIP, 1995 to 2008 Year CIP
Plain Riverine Hill 01.12.1997 to 28.01.1999 3.5
0 to 5 6.31 6.32 6.37 29.01.1999 to 31.03.2000 3.5
Above 5 to 10 6.33 6.34 6.38 01.04.2000 to 24.07.2000 5.9 Above 10 to 30 6.35 6.36 6.4 25.07.2000 to 11.07.2001 5.65 Above 30 to 50 6.37 6.38 6.42 12.07.2001 to 31.03.2002 5.65
Above 50 6.38 6.4 6.43 01.04.2002 to 30.06.2002 5.65
01.07.2002 to 18.02.2008 5.65
SIP, 2008 to 2015 Year CIP
0 to 5 6.51 6.52 6.62 2008-09 5.65
Above 5 to 10 6.54 6.56 6.63 2009-10 5.65
Above 10 to 30 6.58 6.6 6.68 2010-11 5.65
Above 30 to 50 6.61 6.64 6.71 2011-12 5.65
Above 50 6.64 6.68 6.74 2012-13 5.65
2013-14 5.65
Source: The SIP for different geographical slabs has been calculated based on the information provided on transportation costs and profit margins of the fair price shops. Information of CIP is from www.indiastat.com, browsed on 30th June 2017.
Table 4.7 shows the SIP and CIP for APL rice in the state from 1997 to 2014. The upper slot of the table shows the SIP fixed for the APL rice from 1995 to 2008 and the lower slot of the table shows the revised SIP rate of APL rice from 2008 to 2015. It is also seen that CIP for APL rice has changed for 6 times from first phase of TPDS introduced in 1997 to second phase of TPDS which was introduced in 2002. From July 2002 onwards CIP for APL rice remained fixed till 2013-2014. The CIP for APL rice was fixed at Rs7 per kg from December 1997 to March 2000. From April 2000 to July 2000 it was Rs11.80 per kg. From July 2000 to July 2001 it was fixed at Rs 11.30 per kg. From July 2001 to July 2002 CIP for APL rice was changed for 3 times. Accordingly SIP for APL rice has been fixed by the state government based on the geographical classification. The SIP remained fixed in this time though CIP has changes several times in both the phases of TPDS. Though both SIP for APL and BPL is higher than CIP in Assam, but it is still lower than average open market price.
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Table 4.7State Issue Price (SIP)/Central Issue Price(CIP) for APL_Grade A rice in Assam, 1995 to 2008
SIP , 1995to 2008 Year CIP
Distance slab
Plain Riverine Hill 01.12.1997 to 28.01.1999 7 (in km)
0 to 5 8.96 8.97 9.02 29.01.1999 to 31.03.2000 9.05
Above 5 to 10 8.98 8.99 9.02 01.04.2000 to 24.07.2000 11.8 Above 10 to 30 8.99 9. 00 9.05 25.07.2000 to 11.07.2001 11.3 Above 30 to 50 9.01 9.03 9.06 12.07.2001 to 31.03.2002 8.3 Above 50 9.02 9.05 9.08 01.04.2002 to 30.06.2002 7.3
01.07.2002 to 18.02.2008 8.3
SIP , 2008 to 2015 Year CIP
Distance slab
Plain Riverine Hill 01.07.2002 to 18.02.2008 8.3 (in km)
0 to 5 9 9.02 9.11 2008-09 8.3
Above 5 to 10 9.04 9.05 9.13 2009-10 8.3
Above 10 to 30 9.07 9.09 9.18 2010-11 8.3
Above 30 to 50 9.1 9.14 9.21 2011-12 8.3
Above 50 9.14 9.18 9.23 2012-13 8.3
2013-14 8.3
Source: The SIP for different geographical slabs has been calculated based on the information provided on transportation costs and profit margins of the fair price shops. Information of CIP is from www.indiastat.com, browsed on 30th June 2017.