Further hike in PDS prices

By Gargi Parsai

NEW DELHI, MARCH 29. Even as a majority of political parties, including the BJP's coalition partners, are demanding a rollback of the hike in essential commodities proposed in the Union Budget, the Centre today announced a steep upward revision of the Central issue price of wheat and rice distributed through the Public Distribution System (PDS) effective from April 1.

The price of levy sugar has also been raised from Rs. 12 per kg to Rs. 13 per kg with effect from April 1. However, since most States have to get their act together with regard to weaning out income tax assessees from the levy sugar allocation, the Ministry of Public Distribution and Consumer Affairs has authorised allocation of levy sugar at old levels to be ``adjusted'' later.

For the Below Poverty Line (BPL) population, the price of wheat has been hiked from Rs. 2.50 paise per kg to Rs. 4.50 paise per kg and the price of rice has been raised from Rs. 3.50 paise per kg to Rs. 5.90 paise per kg, marking an increase of 80 and 68 per cent respectively.

For the Above Poverty Line (APL) population, the rate of wheat has been raised from Rs 6.82 paise per kg to Rs 9.00 paise per kg, marking an increase of 31 per cent. The price of rice has been raised from Rs. 9.05 paise per kg to Rs. 11.80 per kg, registering an increase of 30 per cent.

The Centre, however, did not declare the new prices for the wheat to be sold under the open-sale policy. It is likely to be matched with the rate set for the APL population under the PDS.

The hike in PDS prices has been effected due to the increase in the minimum support price (MSP) of wheat (earlier this month) from Rs. 550 per quintal to Rs. 575 initially, and later to Rs. 580 when the Chief Ministers of Haryana and Punjab demanded a higher support price. As wheat's MSP is already high, the Commission for Agriculture Costs and Prices (CACP) had recommended a freeze on last year's level, but the Centre has set the new price at Rs. 580.

As per the principle announced in the budget proposals by the Union Finance Minister, Mr. Yashwant Sinha, the hike in PDS commodities is set at 50 per cent of the Economic Cost (to the Food Corporation of India) for BPL families and 100 per cent of the Economic Cost for APL families. At an MSP of Rs. 580 per quintal, the Economic Cost for wheat is Rs. 900 per quintal and for rice it is Rs. 1180 per quintal.

In the case of levy sugar distribution, the Ministry has convened a meeting of State Food Secretaries and Income Tax authorities early next month to work out the modalities of withdrawing the income tax assessees from the system.

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