The parliamentary standing committee on consumer affairs, food and public distribution on Thursday criticised the department of consumer affairs on the disbursement of funds under the price stabilisation fund (PSF) to state and agencies including Nafed, MMTC and NCCF.
“The disbursement of funds under the PSF to several states and key agencies, such as Nafed, MMTC, NCCF, and Kendriya Bhandar, has not been uniform,” the panel submitted to Lok Sabha.
What does the panel suggest?
The panel has suggested that strengthening the monitoring system to track procurement activities for essential commodities like pulses, onions, and potatoes, improving buffer stock management, and conducting periodic reviews of fund utilization at the state level will help achieve the goals of the PSF scheme more effectively.
Under the PSF, the department through agencies including Nafed, NCCF and state government entities procures agricultural commodities—including pulses and onions—at market prices and releases them in a calibrated manner to discourage hoarding, curb speculative practices, and ensure affordable supplies to consumers.
Concerns over a reduction in budgetary allocations
The panel also expressed concern over the consistent reduction in budgetary allocations for schemes especially price stabilisation fund and consumer protection initiatives.
“Although there have been assurances of continued funding through sale proceeds from PSF operations, the department has failed to assess the exact requirements under the scheme,” according to the panel.
Under the PSF, Rs 4019 crore has been allocated for 2025-26.
While stating that the government is committed to protecting the consumers from price volatility by ensuring availability of essential food commodities at affordable prices, the department has stated that Rs 7000 crore allocated towards PSF in the RE level of 2024-25 out of which over 99.6% was utilised.
‘PSF Operations are dynamic in nature and depend on prevailing market scenarios. The primary purpose of PSF operations are not to replace the market, but to nudge the market players towards a stable price regime,” the department has stated.
In response to the department of consumer affairs response to reduce allocations under various schemes, the panel stated that the reply remains ‘inadequate and evasive on several critical issues raised by the committee,’.
“Despite the heavy expenditure of Rs 7,204.50 crore in the previous financial year (FY25), the Department’s lower BE proposal for 2025–26 appears incongruous and lacks adequate justification,” according to the report. The government has allocated Rs 4230 crore to the consumer affairs department for FY26 which includes allocation for PSF.
Earlier the panel in a separate report had stressed the need for a data-driven assessment of PSF requirements, taking into account factors such as population size, price volatility, and the effectiveness of current stabilisation mechanisms.
