The Central government has decided to approve the inclusion of wheat and rice under the price stabilization fund (PSFF) after it began selling Bharat atta and rice as part of its retail intervention to cut down inflation as prices are ahead of general elections, a government official stated.
The fund is being used to build up India’s buffer stock of key food items and release these in the market when prices rise. So far, only potatoes, onions, and pulses have been under PSI.
The new step will see the central government give a payout to the Food Corporation of India (FCI) for supplying Bharat rice and atta to the central procurement agencies National Agricultural Cooperative Marketing Federation of India Ltd and National Cooperative Consumers’ Federation of India. The FCI is supposed to get a subsidy of Rs 435 for a quintal of wheat and Rs 200 per quintal of rice given to Nafed and NCCF for processing them and selling them under the Bharat brand.
The central government is already selling Bharat rice and atta at a subsidized price of Rs 29 and Rs 27.50 a kg. However, sales of the Bharat brand haven’t picked up.
The official said, “Inclusion of wheat and rice as PSF commodity will enable subsidy payment from the open market sale scheme operations for wheat and rice,” and further added, “Inclusion of rice as one of the commodities for PSF operations was done last September, while wheat has been added recently. The inclusion of wheat means a subsidy of around ₹326 crore, which has been approved by the concerned authorities and will be given to FCI from PSF,”
“FCI may claim the subsidy amount through DFPD (department of food and public distribution) for the quantity of wheat allocated for Bharat atta, and DoCA (department of consumer affairs) will disburse the approved subsidy after examining the reimbursement claim.”
The Price Stabilization Fund was set up in 2014-2015 with a corpus of 500 crores to maintain bugger stocks that would discourage hoarding and speculation in the market. The goal was to protect consumers by releasing commodities at reasonable prices through the calibrated release of the stock from the buffer and incentivizing domestic production through direct purchase.
