Government is planning to provide one kg of sugar to an additional 16.3 crore families through the public distribution system (PDS) at a subsidised rate that will cost the exchequer Rs 4,727 crore and is also mulling offering additional foodgrains from buffer stock to clear storage ahead of monsoon.
According to sources, the food ministry’s proposal to extend the scheme of providing sugar at a subsidised rate was discussed during the first Cabinet meeting of the new government held last week but no decision was taken.
Instead, the cabinet asked the ministry to rework the proposal and consider the distribution of additional foodgrains (wheat or rice) under the PDS, they added.
At present, sugar is distributed at a subsided rate of Rs 13.5 per kg to 2.5 crore families under the Antyodaya Anna Yojana (AAY). The proposal is to extend one kg sugar supplies to additional 16.29 crore beneficiary families, would cost Rs 4,727 crore to the exchequer, sources said.
The ministry is thinking of supplying 1 or 2 kg of additional foodgrains but a final call is yet to be taken, sources said. Under the National Food Security Act (NFSA), the government is supplying 5 kg of foodgrains each per month to over 80 crore people at a highly subsidised price. Wheat is being supplied ar Rs 2 per kg, while rice at Rs 3 per kg.
The distribution of additional foodgrains through the PDS is being considered as state-run Food Corporation of India (FCI) is saddled with wheat and rice stock. With some foodgrains stock kept in open space, the FCI is under pressure to clear stock before the monsoon season starts.
Southwest monsoon is expected to hit Kerala on June 5. Already, the FCI has started offloading wheat stock to bulk consumers but traders are not keen to buy at such high rate at a time when the grain is easily available in the open market at a lower rate.
The government’s buffer stock is overflowing because of bumper production as well as procurement of wheat and rice in the last few years.