Govt may provide sugar subsidy to AAY families

The food ministry will soon move a Cabinet note seeking approval to continue subsidy to states for sale of sugar to poor families covered under the Antyodaya Anna Yojana (AAY) under the public distribution system.
"Department of Food and Public Distribution is taking up the matter with the competent authority for approval to continue sugar subsidy in case of AAY families," Minister of State for Finance Arjun Ram Meghwal said in a written reply to the Rajya Sabha.
The sugar subsidy was discontinued with the effect from March 2017 as per the recommendation of the Expenditure Management Commission, he added.

According to a senior food ministry official, a Cabinet proposal is being prepared and the same will be soon sent for approval.
Before presentation of the Budget, Food Minister Ram Vilas Paswan had written to the finance minister to continue sugar subsidy for AAY families, the official said, adding that even some states have raised this issue with the PMO.
Under the scheme, the Centre was providing Rs 18.50 per kg subsidy on sugar to states for selling it via ration shops.

From the next fiscal, the subsidy has been withdrawn and only Rs 200 crore has been earmarked in the Budget to clear past claims. In this fiscal, Rs 4,500 crore has been allocated for this scheme.

Under the scheme, states were buying sugar from open market at wholesale rates and selling at a subsidised rate of Rs 13.50 per kg through PDS. The Centre was providing subsidy of Rs 18.50 per kg to states.
The subsidised PDS sugar was used to be given to 40 crore beneficiaries of BPL (below poverty line) families. About 2.7 million tonnes of sugar per annum was required for PDS sale.
The sugar subsidy is discontinued in view of all states rolling out the Food Law under which there is no distinction between categories of beneficiaries as BPL.