Delhi Cabinet on Monday approved a mechanism to continue the supply of sugar at Rs13.50 per kg to 3.64 lakh ration card holders under the Public Distribution System (PDS) even after the Union Government decided to abolish the levy sugar resulting in discontinuation of allocation of sugar to the States for PDS.
The monthly consumption of sugar is 2,200 metric tones in Delhi. The Centre provides subsidy of Rs18.50 per kg while the retail price at Fair Price Shop is Rs13.50 per kg. The open market price of sugar is around Rs34-35 per kg. If the Government purchases sugar from the open market at Rs34 per kg, it would have to spend an additional Rs9 crore per month.
As per the communication received, this subsidy by the Centre would be available only for the financial years 2013-14 and 2014-15. The Centre has asked the State to purchase sugar from the open market for fair price shops and for which it will provide subsidised sugar at Rs18.50 per kg; remaining amount will have to be paid by the State.
After the Cabinet meeting, Chief Minister Sheila Dikshit said that her Government has always been taking care of the poor sections of the society, hence, decided not to discontinue the benefit. It was decided that the State Government would procure 2,200 MT sugar per month through Delhi State Civil Supplies Corporation (DSCSC) ltd. from open market through competitive bidding.
The Government would bear the difference between the procurement cost of sugar and total of the subsidy receivable from the Central Government and price of supplied sugar to the ration card holders. She further stated that the State Government has been providing 6 kg sugar per ration card which will be continued.
Sources said that the Delhi Government has opposed the decontrol of levy sugar and conveyed it to the Ministry of Consumers Affairs and termed it an additional burden on the State exchequer.
Secretary (Food and Civil Supplies) SS Yadav has written his counterpart Joint Secretary T Jacob in the Ministry of Consumers Affairs to review the scheme immediately and increase the subsidy amount and link it to the price difference between the cost of the State Government and total receivables.