A fallout of the implementation of the National Food Security Act (NFSA) in the State, sugar will no longer be part of the subsidised food items supplied through the public distribution system (PDS) in the State. The impact may soon be felt in the open market, where the price of sugar is likely to skyrocket. The current price of sugar in the open market is around ₹45.
Moreover, there were reports of the Food and Agriculture Organization (FAO) forecasting a further increase in the global prices of sugar.
With the Centre taking away the sugar subsidy following the NFSA legislation, there has been no supply of sugar to the State since April.
Six States, including Kerala, had been receiving sugar from the Centre at a subsidised rate till March
Till now, the States had been purchasing sugar to be supplied through the PDS, from the open market at wholesale rates, to be sold through ration shops at a subsidised rate of ₹13.50 a kg to BPL families [The BPL category is now divided into Priority card holders and Antyodaya Anna Yojana (AAY) card holders or the poorest of the poor].
The Centre used to give a subsidy of ₹18.50 per kg to States. But with the allocation on sugar subsidy curtailed from the earlier ₹4,500 crore to just ₹200 crore in the Union Budget 2017-18, the Centre had sounded out the States early itself that it will not be supplying sugar any more to be sold through ration shops.
The BPL category is not defined under the NFSA, while it talks about the AAY, Priority and Non-priority categories.
The subsidy had to be scrapped as the classification of Priority category was almost double that of the earlier BPL category, entailing a financial burden that the Centre could no longer support.
“We have not received any sugar since April. We had been holding the stock we received in March, which is now being supplied to both Priority and AAY card holders as per the existing guidelines. In future, however, the State will have to decide if it can bear the huge burden of buying sugar and selling it at a subsidised rate to 34 lakh families in Kerala,” says Babychen Mukkadan, all-India general secretary of the Retail Ration Dealers’ Association .
“We have now received a communication from the Centre that the sugar subsidy will be continued and limited to just the AAY category, which will receive one kg sugar per family,” Special Secretary, Civil Supplies, Mini Antony said.
Kerala has about 5.95 lakh AAY families. Approximately 29 lakh families in the Priority category who used to receive subsidised sugar through ration shops will now have to buy from the open market.