Things seem to be taking at a brisk pace in implementing the Governments reforms in the upcoming budget. Accordingly there might be cut in the subsidies given by the central government sources said. The news is that the central government is planning to cut the subsidy given to states on Sugar that is distributed through public distribution system scheme (PDS). The subsidy now offered to the state governments per kilo on Sugar is Rs.18.50.With scrapping of subsidy, Government saves Rs. 4500 Crore.
At present, the scheme has a target of 40 crore beneficiaries of BPL (below poverty line) families. About 2.7 million tonnes of sugar per annum are required for PDS sale. As per the existing scheme, states purchase sugar to be supplied through the public distribution system (PDS), popularly known as ration shops, from the open market at wholesale rates and sell at a subsidised rate of Rs13.50 per kg.
The food ministry is unhappy about the decicsion. On these lines Minister Ram Vilas Paswan had written a letter the Finance ministry saying that not to scrap the subsidy to all categories but to continue the scheme at least for the poorest of the poor i.e Antyodaya Anna Yojana (AAY) families. The same was conveyed to the state governments by the food ministry.It also stated that from the next financial year the states have to bear the whole subsidy
Currently the country produces 22.5 million tonnes sugar. Its bit less when it comes to meet the country's demand which is 25 million tonnes. With the preserved stock in the past this can be met. With the five states elections starting from next month, it's interesting whether the central government will announce the subsidy or not.
