NEW DELHI : The price stabilization fund (PSF), established to build buffer stocks of farm commodities to help contain sudden rise in food prices, may get additional allocations in the 2024-25 and 2025-26 budgets of ₹1,500 crore each. The department of consumer affairs (DoCA) has placed a proposal for the allocations before the expenditure finance committee (EFC), government officials aware of the matter said.
The amount of annual budgetary support required for subsequent years of 2024-25 and 2025-26 is ₹1,500 crore, considering expected annual sale proceeds of about ₹4,500 crore based on the average sale proceeds accrual to the corpus in the past three years, according to one of the officials. The sale proceeds in 2023-24 are expected to be “ ₹945 crore from Bharat Dal and ₹4,500 crore from additional procurement of onion”.
For 2023-24, the budget had allocated a token ₹1 lakh for the PSF after no amount was spent in 2022-23 from its allocation of ₹1,500 crore. But last month, the DoCA proposed to the finance ministry to allocate ₹6,345 crore for 2023-24 as its revised estimate for the PSF, according to the government officials who spoke on the condition of anonymity. With this, the total outlay under the PSF scheme for the three years (FY24 to FY26) is expected to touch ₹9,345 crore.
The additional money for 2023-24 has been requested to specifically help increase the buffer stock of onion and pulses. Currently, the Centre has about 1.2 million tonnes (mt) of pulses in its PSF buffer stock, including around 67,000 tonnes of tur and 32,000 tonnes of urad, according to other officials. Given the current stock position, additional procurement of 825,000 tonnes of pulses and 200,000 tonnes of onion are in progress as directed by the committee of ministers for reviewing prices of essential commodities.
“Immediate allocation of budgetary support to the PSF scheme is urgently required to meet the targets, and the government is always ready to give the funds as it aims to build the buffer stock,” one of the officials cited above said.
Queries sent to the departments of expenditure and consumer affairs remained unanswered at press time.
In 2023-24, the PSF began operations with an opening balance of ₹5,933 crore, but this corpus is estimated to have fallen to ₹515 crore because of higher procurement of pulses and onion this fiscal, according to the officials. So far in 2023-24, 500,000 tonnes of onion, 760,000 tonnes of chana (gram), 126,000 tonnes of domestic masur (lentil), 50,000 tonnes of moong (green gram) and a combined 125,000 tonnes of tur (pigeon pea) and urad (black gram) have been procured for the PSF buffer, according to the officials quoted above.
Pulses from the buffer stock are now being utilized for the public distribution scheme (PDS), mid-day meal and ICDS (integrated child development scheme), and for meeting the requirements of the Army and central para-military forces. Pulses are also being given free of cost under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) and Atma Nirbhar Bharat (ANB) packages to mitigate hardships caused to the poor by covid-19. Additionally, the government is offering pulses to states and Union territories for retail interventions to put a lid on soaring retail prices.
PSF was set up in 2014-15 with a corpus of ₹500 crore to maintain a strategic buffer stock that would discourage hoarding and unscrupulous speculation, protect consumers by supplying commodities at reasonable prices through the calibrated release of stock from the buffer, and incentivize domestic production through direct purchase from farmers and farmers’ associations at the farm gate or mandi. During FY15-FY23, the Centre spent ₹27,489 crore under the PSF scheme.
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Published: 24 Dec 2023, 11:29 PM IST