8.20         ndian       onom
     coming into force of the National Food Security            has been evolved for reporting and monitoring on
     Act (NFSA). The new norms are as given in the              a daily basis, procurement operations for wheat,
     table below:                                               paddy and coarse grains in the country.
                      Revised Buffer Stock                            Two decisions30 of the Government of India
                                                                that will impact procurement and stocks of rice
        As on        Existing since April, 2005      Revised    and wheat from are:
                          (in million tonnes)
                                                                      (i) To limit procurement from states that are
       1st April                  21.2                21.04
                                                                           declaring bonus over and above the MSP
       1st July                   31.9                41.12
                                                                           to the extent of targeted TPDS and other
        1st Oct                   21.2                30.77
                                                                           welfare schemes (OWS) requirements.
        1st Jan                   25.0                21.41
                                                                           In the case of non-DCP states declaring
          As income levels of the BPL segment grows,                       bonus, the FCI will not take part in MSP
     in future, the buffer norms for the foodgrains are                    operations in those states.
     supposed to be revised downward. But the logic of
                                                                     (ii) To cap the percentage of levy on rice at
     maintaining such stocks will remain for the purpose
                                                                           25 per cent.
     of market intervention by the government.
     DecentrAliseD Procurement scheme                              storAGe
     The decentralised procurement (DCP) scheme                 The total capacity available for storage of foodgrains
     was operationalised by the government in 1997              as by 2014 was 727 lakh MT, comprising covered
     (together with the Centre and some of the states           godowns of 567 lakh MT capacity and cover and
     also procure foodgrains from the farmers, locally).        plinth (CAP) facilities of 160 lakh MT capacity.
     Under this scheme, the designated states procure,          The existing warehousing facility is limited not
     store and also issue foodgrains under the TPDS.            only in terms of capacity, but also to certain crops.
     The difference between the economic cost of the            The stockholding capacity has not kept pace with
     states and the central issue price (CIP) is passed on      the increase in production and demand for a long
     to the states by the Government of India as subsidy.       time. The challenges of storage have been outlined
     The decentralised system of procurement, helps             by the Economic Survey 2014–15 in the following
     to cover more farmers under the MSP operations,            way:
     improves efficiency of the PDS, provides varieties               (i) The CAP of 160 lakh MT capacity cannot
     of foodgrains more suited to local taste, and                         be treated as scientific storage.
     reduces the transportation costs of the FCI.29
                                                                     (b) Public agencies do not have warehouses
          The Government of India urged all states                         for proper storage of even half of the
     to adopt the DCP scheme so that costs of                              wheat and rice procured by them.
     distribution can be saved and outreach of price
                                                                     (c) In the wake of persistent seasonal inflation
     support mechanism to the farmers in hitherto
                                                                           in perishables like fruits and vegetables,
     weaker areas can be improved. To overcome the
                                                                           there was no effective strategy to control
     problem of gaps in the flow of information about
                                                                           inflation on a sustainable basis.
     procurement operations on day-to-day basis, an
     Online Procurement Monitoring System (OPMS)                    (iv) Cold storage capacity for all type of food
                                                                           items is just 29 MT (Planning Commission
       29.   Ministry of Finance, Economic Survey 2011–12, (New
             Delhi: Government of India, 2012).                   30.    Ministry of Finance, Economic Survey 2014–15, p. 84.