The federal government’s meals subsidy bills are projected to witness a rise of Rs 18,000 crore or 9% to Rs 2.2 trillion within the present fiscal from the Funds Estimate of Rs 2.02 trillion, as per the interim funds because of the large price of carrying and storing surplus rice within the central pool.
Sources informed FE that, the present rice shares of fifty million tonne (MT), three and half instances the buffer, are more likely to push up storage prices alone by Rs 16,000 crore within the present fiscal if the grains aren’t liquidated quickly.
Based on officers, the BE must be revised upward due to rising carrying price of rice in addition to greater procurement.
The financial price of rice, together with minimal assist worth (MSP), storage, transportation and different prices in the beginning of the present fiscal was estimated at Rs 3,975/quintal which can see a rise attributable to surplus rice inventory.
“The prices of storage, transportation and different prices on account of storing surplus rise has been rising steadily and if not liquidated by means of open market
In FY24, the bills on account of meals subsidy was Rs 2.12 trillion, as the federal government has prolonged the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) or free ration scheme to greater than 800 million beneficiaries for subsequent 5 years.
Within the 2023-24 marketing
Due to rising shares, officers mentioned at current the Meals Company of India
Presently, FCI holds 50 MT — 33.21 MT of rice shares and 17.2 MT of grain receivable from millers. The inventory is towards the buffer of 13.54 MT for July 1.
The final fiscal open market sale of rice at Rs 29/kg to bulk consumers didn’t elicit a constructive response as solely round 0.1 MT of rice was bought. Sources mentioned the federal government will assess the sowing of kharif paddy earlier than taking a name on eradicating curbs on shipments.
Final yr, the federal government had initially banned white rice exports and subsequently imposed a 20% cargo responsibility on parboiled rice to enhance home provides as worth rises remained in double digits. The federal government, every so often, allowed rice exports to fulfill the meals safety wants of some international locations on the premise of request.
Retail rice costs rose 12.28% in Could. The inflation in rice costs has been in double digits since October 2022. As well as, officers mentioned FCI to this point has acquired a purchase order indent for 1.5 MT of rice from companies akin to Nafed, NCCF and Kendriya Bhandar for promoting ‘Bharat’ rice. About one MT of grain has been bought by these companies for distribution by means of stores at Rs 29/kg below the Bharat rice initiative launched to curb the spike in costs in February.