Sugar at ration shops may dry up in 15 states next month

States yet to invite tenders after partial decontrol of sugar was implemented

Partial decontrol of sugar might augur well in the long run but not before giving teething troubles.

Sugar supplies in ration shops of around 15 states might end from June 1, as these states have not started inviting tenders for supply, as is required under a new mechanism.

Officials said only Andhra Pradesh, Kerala, Tamil Nadu, Goa, Madhya Pradesh, West Bengal and Delhi had floated tenders or started the process. Three others had shown their willingness to participate in the scheme. Stock in 15 states’ fair-price shops would dry up till these invite tenders. There is no information about Bihar, Jharkhand and Uttarakhand.

The Centre had dismantled the quota system for the sweetener for the Public Distribution System (PDS). The government would stop supplies of PDS sugar to states from June 1, as part of abolition of the levy-sugar mechanism that fixes a quota on private millers for selling subsidised sugar at ration shops. Instead, subsidy up to Rs 18.50 a kg given by states would be reimbursed so that the sweetner could be sold below the market price. The subsidy would be reimbursed only if state governments sell the sweetener at the subsidised price of Rs 13.50 a kg.  

Till May 31, the Centre had supplied sugar through PDS from last year’s stocks.

Officials said among the big consumers of ration sugar, Uttar Pradesh had demanded six more months to switch over to the new system. Odisha said the new system might be delayed by two-three months, while Maharashtra said the time given was too short to shift to the new system. Besides these, the seven Northeastern states and the Union territories of Lakshadweep and the Andaman and Nicobar Islands rely heavily on the Centre’s supply. The Northeastern states want at least one year before they can shift to the new system because of the special situation of these states.

Recently, Food Minister K V Thomas urged all chief ministers to instruct their respective food and civil supplies departments to expedite the process of inviting open tenders to procure sugar from the open market. The department of food met state officials to understand their preparedness in distributing sugar through ration shops in the new format.

Before abolition of the levy- sugar mechanism, the Centre used to sell 2.7 million tonnes every year through ration shops at a heavily subsidised Rs 13.50 a kg.