FAQ

Govt approves disposal of pulses to States and UTs at discounted rates for various welfare schemes

Tags: National Economy/Finance

The Cabinet Committee on Economic Affairs headed by the Prime Minister Narendra Modi has approved the disposal of Chana and other pulses to States and Union Territories at discounted rates to utilize for various welfare schemes on 31 August 2022.

The Chana and pulses will be released from the buffer stock of NAFED (National Agricultural Marketing Federation of India).

The disposal will be done from the stock of pulses procured under Price Support Scheme (PSS) and Price Stabilization Fund (PSF). 

Highlights of the cabinet decision :

• The Central government has offered the State government and Union Territories (UT) 15 metric tonnes of Chana.
• The Chana will be given to the State/UT at a discount of Rs 8 per kg over the issue price of the sourcing state on the first come first serve basis.
• It has also approved enhancement of the ceiling on quantity of procurement under PSS from existing 25 percent to 40 percent in respect of Tur, Urad, and Masur. 
• This will be a one-time dispensation for a period of 12 months or till the complete disposal of 15 lakh MT stock of Chana. 
• The centre will spend 1200 crore rupees for the implementation of this scheme.

Where will the State/UT will use these Chana and pulses :

The States and UTs will utilize these pulses in their various welfare schemes including Mid-Day Meal, Public Distribution System, and Integrated Child Development Programmes.  

Why government is coming up with the scheme ?

• Government maints buffer stock of crops to meet its various needs like price intervention, supply to fair price shops(ration shops). 
•  However due to passage of time the quality of the crops deteriorates  and also the government has to spend money on maintaining the stock.
•  Many times before the previous stock is exhausted , new crops are harvested and if it is a bumper harvest then the problem of storage and its cost increases .To solve this problem the government has come up with this particular proposal. 
• At present NAFED holds Chana stocks of 35.7 lakh metric tonnes against the required buffer stock of 23 lakh metric tonnes. A portion of the stock is more than 2 years old.
• The Agriculture ministry  fourth  estimates for 2021-22 season(July-June) expects 37.5 lakh metric tonnes production of Chana.
• To make storage space for the forthcoming harvesting of chana and pulses crops,  the government wants to clear the excess stock .

Government scheme to help farmers :

Price Support Scheme :

• It has been launched by the government of India. 
• Under this scheme when the prices of commodities fall below the Minimum Support price (MSP) , State and central notified procurement nodal agencies purchase commodities directly from the farmers at MSP under specified Fair Average Quality, 
• This helps and protects the farmers against the economic loss in farming.

Price Stabilization Fund (PSF) :

• It was set up by the government to deal with situations when there is an excessive change in the prices of specified agricultural commodities like onion, potatoes and pulses.
• Under the scheme the central or state agencies which buy such commodities from the farmer are provided interest free loans so that they can buy the agricultural commodities from the farmers.
• The agricultural commodities bought by the central and state agencies are used to build buffer stock.
•  The stock is released in the market when the prices of the agricultural commodities are high so as to increase the supply and bring down its prices.