Price rise: Tamil Nadu govt may rejig PDS of tur dal, oil
The Tamil Nadu government is considering reducing subsidies on tur dal and palmolein oil, currently costing Rs 3,800 crore annually, for 1.6-1.9 crore cardholders. Subsidies have surged from Rs 1,800 crore in 2014-15, with procurement prices for dal rising to Rs 150-155 per kg and oil to Rs 90 per litre. Monthly subsidies rose from Rs 260 crore in December 2023 to Rs 310 crore in May 2024.
CHENNAI: Tamil Nadu government is considering a major overhaul of the distribution of tur dal and palmolein oil through the special PDS as the subsidy for the two products accounts for a massive Rs 3,800 crore for 2024-25. Reliable sources told TNIE that the finance department has advised the state government against continuing the supply at highly subsidised rates. These products are bought by 1.6 to 1.9 crore cardholders each month.
According to highly placed sources, the government is likely to adopt a combination of strategies, including the reduction of subsidies by increasing the sale prices, partial discontinuation of edible oil distribution and introduction of eligibility criteria. The special PDS was introduced by former chief minister M Karunanidhi on April 14, 2007, to control the prices of essential commodities in the open market, and is fully funded by the state government.
While officials from the Tamil Nadu Civil Supplies Corporation (TNCSC) and the Civil Supplies Commissionerate did not respond to TNIE’s request for comment, a senior official said the government’s subsidy for these two items has more than doubled from Rs 1,800 crore spent in 2014-15.
“When the scheme was launched in 2007, the procurement price of tur dal was Rs 50 per kg and oil was Rs 45 per litre, and these items were sold at Rs 30 per kg and Rs 25 per litre respectively. Since then, the procurement prices have increased manifold but the sale prices have remained the same,” he said.
In January 2023, the TNCSC purchased dal at an average price of Rs 100 to Rs 105 per kg. This increased to Rs 120-Rs 125 from January 2024 due to a price rise in the open market. Last month, the TNCSC reportedly procured dal at Rs 150 to Rs 155 per kg due to higher market prices, incurring several crores of rupees in additional expenses.
Similarly, the average procurement price of edible oil increased from `80 in February last year to Rs 90 in March this year. Consequently, the subsidy (difference between the procurement price and the sale price) provided by the government for tur dal has increased from Rs 20 per kg in 2007 to Rs 120 per kg in June 2024.
This month, price of ordinary tur dal increased from Rs 170 to Rs 180 per kg
Similarly, the subsidy for edible oil has increased from Rs 20 per litre in 2007 to Rs 65 per litre in June 2024. This July the market price of ordinary tur dal has further increased to around Rs 170 to Rs 180 per kg, while branded dal is sold at Rs 210 to 220 per kg.
The state government has not issued orders yet to procure and supply these two items for August through the PDS. Confirming this, the senior official said, “Given the state’s financial position, continuing the supply of these two items to two crore ration cards at the current price may not be possible. The matter has been taken up with the government and the decision on this issue is expected soon”.
Currently, the state government spends nearly Rs 400 to Rs 420 crores per month to procure two crore kgs (20,000 MT) of tur dal and two crore litres of cooking oil. However, it collects only Rs 100 to Rs 110 crores through sale. Within the last one year, the monthly subsidy which stood at Rs 260 crores till December 2023 rose to Rs 310 crores in May 2024 and is expected to increase further from August onwards due to the rise in market prices.
The union government supplies rice, wheat, and kerosene for over 1.12 crore priority household (PHH) cards issued to BPL families, including beneficiaries of various social security pension schemes. The rice for 1.12 crore non-priority household (NPHH) cardholders is fully funded by the state.
Recommended for you
Leave a Reply
Leave a Reply
