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To check prices,govt to raise PDS rice,wheat by 10 kg

In an attempt to douse the rising prices of rice and wheat,the UPA government on Wednesday decided to provide an extra 10 kg of rice and wheat to all beneficiaries of the targeted public distribution system....

Written by Amitav Ranjan | New Delhi |
January 21, 2010 4:21:54 am

In an attempt to douse the rising prices of rice and wheat,the UPA government on Wednesday decided to provide an extra 10 kg of rice and wheat to all beneficiaries of the targeted public distribution system (TPDS) in January and February. The dole would release an extra 5.76 lakh tonnes of rice and 12.27 lakh tonnes of wheat in each of the two months,and cost the national exchequer Rs 340 crore as additional food subsidy for both months.

“The allocation is proposed to be made in addition to existing allocation under the TPDS and is purely ad hoc. The states would be advised to immediately lift the grains,and in no case beyond March,” said an official.

Rice and wheat were two of the 11 ‘commodities of concern’ highlighted before the Cabinet Committee on Prices last week where the proposal was to release more grains to calm their prices. Both had recorded a price rise of more than 12 per cent,compared year-on-year,in November. “Given a comfortable situation of food stocks,there should not be any hesitation in releasing stocks of Food Corporation of India without any further delay,” the CCP note had suggested.

Currently,a cardholding family can lift only 35 kg of foodgrains if it falls below poverty line (BPL) or is covered under Antyodaya Anna Yojana (AAY) while those above poverty line (APL) get transitory allocation — depending upon availability of central stocks — ranging between 10 and 35 kg per family per month in different states. The allocation was proposed by Agriculture Minister Sharad Pawar and agreed to by Prime Minister Manmohan Singh on Monday,but it got final approval on Wednesday with Finance Minister Pranab Mukherjee agreeing to take on the extra subsidy burden.

Sources said the extra wheat would be available to cardholders at Rs 10.80 per kg (equal to its minimum support price) rather than Rs 4.15 at which the 35-kg is available for BPL families and Rs 2.00 for AAY families. Extra rice would carry a price tag of about Rs 13 per kg (equivalent to MSP-derived price) rather than Rs 5.65 for BPL and Rs 3.00 for AAY families.

However,this would still be less than the price that the Centre charges for any requirement from states over and above TPDS quotas. That price,subject to stock availability,is under Open Market Sale Scheme and is sold at rates equal to FCI’s average economic cost.

The UPA government’s next move would be to empower the FCI to sell wheat at select depots to small processors whose monthly consumption of wheat is less than 30 tonnes such as flour makers,chakkies and bakeries to improve the market availability,sources said.

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