Rice Sets The Tone For Another Centre-State Battle

The ongoing tussle between the Congress government in Karnataka and the Centre over the release of rice for the state's much-publicised 'Anna Bhagya' scheme marks the beginning of what is likely to be a series of political and administrative confrontations between Bengaluru and New Delhi. 

Backed by an enormous victory in the Karnataka election, the Congress has been aggressive in reasserting its ideological position in the state, whether it is the decision to remove chapters on the RSS founder in school textbooks, introduced by the previous BJP government, or the decision to do away with the controversial anti-cow slaughter law.

While a political slugfest was expected and perhaps par for the course, the concern was how it would manifest itself in Centre-state relations in a way that could be debilitating at an administrative level.    

One of the key aspects of the Congress's campaign for the Karnataka election was the five welfare schemes, which included 10 kilograms of rice to families below the poverty line, or those poorest - the Centre already releases 5 kg of rice to BPL families under the State's Anna Bhagya scheme. 

As anticipated, the first decision of the Siddaramaiah cabinet was to implement welfare moves, including the rice scheme. The state estimated that it needed 2.28 Lakh metric tons in a month to deliver an additional 5 kg of rice, over and above the central grant, to BPL families.

Soon after the announcement was made by the cabinet, the state government, in a letter dated June 9,  wrote to the Food Corporation of India, seeking to buy rice through the Open Market Sale Scheme (Direct Purchase)  (OMSS -D) without an e-auction at the reserve price set by the Food Corporation of India (FCI).

Subsequently, in a letter dated June 12, the Karnataka government said the FCI approved the sale of rice at the reserve price of Rs.3,400 per quintal. The state government has released two orders from the FCI General Manager approving the release of rice - one order for 2,08,425 metric tonnes and another order for 13819 metric tonnes. Both of these were for the month of July as the Anna Bhagya scheme was to roll out from July 1.

However, on June 13, the Consumer Affairs Ministry of the central government issued an order to the FCI to discontinue the sale of rice to state governments under the OMSS (D) scheme. Only northeastern states, hilly states and those affected by natural calamities, or a law-and-order crisis, are allowed to procure rice through the OMSS (D) scheme.  

While the Centre argues that the decision to discontinue the sale of rice was essential to maintain price levels and contain inflation, the Karnataka government and the Congress party have alleged that it is "hate politics" of the central government against poor beneficiaries. 

Given that the delivery of rice, and other schemes, is a prestige issue for the Congress, and personally to Chief Minster Siddaramaiah, any slip-up in the rollout of the scheme could have a huge political fallout. Irrespective of the Centre-state battle, as far as the optics are concerned, it is on the state government to deliver its promise.  

At the grassroots, the BJP has already taken the offensive and accused the state government of including the 5 kg rice given by the central government as part of its scheme. The BJP is demanding that the state government give 10 kilos over and above the central scheme of 5 kilos.  

While the Karnataka government may now have to procure rice from other opposition-ruled states, the Centre-state confrontation is a theme that is likely to intensify in the southern state in the run-up to the 2024 parliamentary elections. Sharing of GST revenues and other policy matters are already simmering issues and there is a worry that administration and delivery mechanisms could be a casualty in this battle.