1. Commodity News

Government Planning to Offer Subsidised Sugar to 16 Crore Additional Families

Abha Toppo
Abha Toppo

Center is planning to provide 1 kg of sugar to an additional 16.3 crore families through the public distribution system (PDS) at a subsidised price that will cost the exchequer Rs 4,727 crore. It is also considering offering extra foodgrains from the buffer stock to clear storage prior to monsoon. As per sources, it was during the 1st Cabinet meeting of the new government held last week wherein the food ministry’s proposal to extend plan of providing sugar at a subsidised rate was discussed, however no decision was taken.

Sources added instead, the government asked the ministry to revise the proposal and consider distribution of additional foodgrains like rice or wheat under the PDS. Presently, sugar is given at a subsided price of Rs 13.5 / kg to over 2.5 crore families under Antyodaya Anna Yojana (AAY). Now the new proposal is to extend 1 kg sugar supplies to added 16.29 crore families that would cost Rs 4,727 crore to the exchequer, sources told.


The ministry is also thinking to supply 1 or 2 kg of extra foodgrains but a final decision is yet to be made, they said. The government, under the National Food Security Act (NFSA), is supplying five kg of foodgrains each / month to more than 80 crore people at a highly subsidised rate. In addition, wheat is being supplied at Rs 2 / kg and rice at Rs 3 / kg. The distribution of extra foodgrains through the PDS is being considered as the Food Corporation of India (FCI) is saddled with rice and wheat stock.

With some foodgrains stock kept in open space, the Food Corporation of India is under pressure to clear the stock ahead of monsoon season.

Meanwhile, the Southwest monsoon is likely to hit Kerala tomorrow, 5th June. The FCI already has begun offloading wheat stock to bulk customers but the traders are not keen to purchase at such high price at a time when the grain is easily available in the open market at lower price. The centre’s buffer stock is overflowing due to bumper production and procurement of rice and wheat in the past few years.

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