Govt shelves subsidy cut move

Under attack from Left parties and other allies like DMK, the government on Tuesday put on hold the decision to reduce quantity of foodgrains under the public distribution system that would have brought down food subsidy.

"I am not executing the decision on food subsidy cut. The entire decision has been stayed. I will discuss this issue with UPA people," Agriculture and Food Minister Sharad Pawar told reporters in New Delhi, a day after the Congress party itself asked the coalition government not to go ahead with the scheme.

"I am going to explain the entire position behind the food subsidy cut to Cong party, CPM and CPI," he said on the sidelines of a function to launch a new scheme on dairy/poultry venture capital fund in New Delhi.

The government took the decision last week to reduce offtake quantity of foodgrains for both Above Poverty Line (APL) and Below Poverty Line (BPL) families to 20 kg and 30 kg, respectively, while increasing the issue prices for wheat and rice under PDS.

As a result of this move, food subsidy for 2005-06 would have come down by Rs 4,524 crore (Rs 45.24 billion).