Over 20,000 fair price shops in West Bengal will soon get a major facelift with Kishore Biyani-led Future Group tying up with the state’s food and civil supplies department to convert ration shops into mini-malls. Future Group will supply non-PDS items to these shops and will sell them at rates much below those in the open retail market.
West Bengal food and civil supplies secretary Manoj Agarwal said this wouldn’t be a subsidy scheme and would be open to all consumers irrespective of being a ration card-holder or not. The state government will enable the Future Group to make use of its distribution and dealership network and in turn it will supply non-PDS items from the fair-price shops at a lower than market rate.
“Future Group has given us in writing that the sale price of the non-PDS items in the fair-price shops will be lower than the retailer’s purchase price in the open market. This will translate to about 20-25% discount on every item putting the Kirana shop owners under stiff competition,” Agarwal said. While there is no element of subsidy in it, the government will gain around 1/2% commission on every item sold for deploying its labour and infrastructure, he added.
The Future Group has given a list of 600 items and those items would all be branded products from the likes of ITC and Hindustan Uniliver. Although the government is starting the initiative with the Future Group, other groups are also welcome to come and join the initiative. The initiative would set a new price discovery mechanism and would set market forces to lower prices of commodities, Agarwal felt.
The government would roll out the scheme through a pilot project in the district of North 24 Parganas and there have been discussions with the distributors regarding overhauling of their facilities, so that the items can be properly displayed. Future Group will take back the items if there is no demand but the demand scenario will become clear after the roll-out in the first phase, Agarwal said, adding the overhaul of the ration shops will have to be done by the dealers and distributors themselves, since there is an opportunity of their turnover to grow two-three times.
In case of losses, the Future Group will absorb a part of it by taking back the items, an official said.
“Within the next six months all retail fair-price shops will be transferred into mini-malls in North 24 Paraganas, following which it would be rolled out in the entire state,” Agarwal said.
While this model would be unique for West Bengal, the Rajasthan government had also tied up with the Future Group last year to convert the fair-price shops to Annapurna Bhandar. Under this model, all the fair-price schemes were brought under the management of the Future Group but in West Bengal, running the PDS schemes have been left to the government.
“We have brought all 20,266 fair-price shops in the state under insurance cover,” food and supplies minister Jyotipriyo Mullick said. Damages caused in this business would be covered under the said insurance as damages covered in the PDS scheme, an official added.
Ration dealers face loss of stock during floods and they generally claim compensation from the state government for such losses. However, with the state government making insurance coverage mandatory from last year, the state government has been relieved of the compensation burden. “But we are happy to spend `5,200 crore annually on account of subsidy to make essential commodities available to our people,” Mullick said.