Home ECONOMY Odisha govt’s silence on subsidized sugar costs state Rs 400 cr a...

Odisha govt’s silence on subsidized sugar costs state Rs 400 cr a year!


Odisha Sun Times Bureau
Bhubaneswar, Sep 25:

Naveen Patnaik government in Odisha that loves to distribute freebies and cry central neglect to garner popular votes, is strangely silent on the issue of subsidized sugar, which affects 50 lakh consumers in the state and costs the state a loss of a whopping Rs 400 crore in central assistance each year.


While the state government spends about Rs 1200 crore a year on the Rs 1 rupee rice scheme without any qualms, it is unwilling to spend the Rs 42 crores needed to avail subsidised sugar from the Centre.

The decision has a potential to provide subsidized sugar to 49,40,818 consumers, including 12,53,574 consumers covered by the Antyodaya Yojana.

As per sources in the Food and Supplies Department, the Union Government has stopped distribution of sugar through Public Distribution Shop (PDS)s since May 2013 and has instead enforced a new policy that mandates the state governments to procure sugar from open market and distribute two kilo each at Rs 13.50 a kg to the intended beneficiaries every month.

The two kilo quota can also be increased during festive seasons. As per estimates, the state requires 1,08,214 metric tonnes of sugar a year, including 3730 metric tonnes for the festive season.

While the Union Government provides a subsidy of Rs 18.50 on a kilogram of this sugar, the consumers are supposed to pay Rs 13.50 and the state government is supposed to bear the rest of the expenses that include transportation, distribution and retailer commission.

The annual expenses for the transportation, distribution and retailer commission are estimated to be around Rs 42 crore, while the subsidy by the Union Government mounts to more than Rs 400 crore. The state is losing out on the massive subsidy as the government is stingy about paying just Rs 42 crore.

“As per the existing rules, consumers are supposed to pay for the additional expenses on transportation, distribution and other related charges. Besides, they are supposed to pay the difference if the sugar price goes beyond Rs 32. However, the Union Government didn’t allow us to hike the retail price of sugar to cover up the expenses on transportation, distribution and retailer commission. This is the reason we have not been able to procure sugar from open market and distribute it through PDS even though we had been doing it between 2002 and 2013,” said Food and Civil Supplies Minister Sanjay Dasburma.

A senior official from the department had a different view that reveals the real intention of the government.

“This sugar distribution is a complex affair. Neither we have the necessary logistical support, nor do we have the required manpower. We still attempted to do our best and wrote a letter to Union Food and Supplies Department requesting him to allow us to take the difference from the consumers. The Union Government has agreed to the proposal and we had made a proposal on March 31 to the state government to restart distribution,” he said.

“Keeping the logistical and manpower challenges in mind, our proposal focused on providing the BPL families with 1.750 kilogram of sugar every month. We had requested the government to take a call on this on the departmental note sheet. However, the Chief Secretary rejected it and sent the file to the third floor. The Food and Civil Supplies Minister had signed it. Later the Chief Minister signed it on April 7 and that was the end of the road for subsidized sugar in Odisha,” he added.