The Cabinet Committee on Economic Affairs (CCEA) is likely to approve tomorrow a proposal to continue subsidy to states for sale of sugar to AAY families, the poorest of the poor, under the public distribution system (PDS). The sugar subsidy was discontinued with the effect from March 2017. The food ministry moved a CCEA note as it felt the need to continue it for at least 2.5 crore families covered under the the Antyodaya Anna Yojana (AAY). Even some states had raised the matter with the PMO.
According to sources, the food ministry’s proposal on PDS sugar subsidy for AAY families is on the agenda of the tomorrow’s CCEA meeting. The ministry has proposed to continue providing a subsidy of Rs 18.50 per kg to state governments for selling one kg of sugar to each of 2.5 crore AAY families via ration shops.
About 3 lakh tonnes of the sweetener will be required to cover all AAY families and the subsidy burden on the Centre will be around Rs 550 crore, the sources added.
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In the 2017 Budget, the government withdrew the sugar subsidy and earmarked only Rs 200 crore to clear past claims. For the last fiscal, Rs 4,500 crore was allocated for the scheme that covered BPL families also.
Under the scheme, states were buying sugar from the 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.