National Food Security Bill: Challenges and implications - ICICI Bank : Treasury Research

- The National Food Security Bill (NFSB) proposes food entitlement to nearly 2/3rds of India's population, covering up to 75% of the rural and 50% of the urban population.

- From the implementation aspect, challenges are manifold, right from procurement to distribution of foodgrains to the final beneficiaries.

- The NFSB threatens to reduce the available marketable surplus with the private sector, as it requires the Centre to procure at least 62 mn tonnes of foodgrains annually.

- We expect the fiscal implications of the NFSB in FY2014 to be limited on account of the likely implementation of the Bill in phases. However, going ahead, a viable plan to fund the food subsidies without disturbing the fiscal balance is crucial.

Source : Equity Bulls

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