CHENNAI: Tamil Nadu government is considering a major overhaul of the distribution of tur dal and palmolein oil through the special PDS as the subsidy for the two products accounts for a massive Rs 3,800 crore for 2024-25. Reliable sources told TNIE that the finance department has advised the state government against continuing the supply at highly subsidised rates. These products are bought by 1.6 to 1.9 crore cardholders each month.
According to highly placed sources, the government is likely to adopt a combination of strategies, including the reduction of subsidies by increasing the sale prices, partial discontinuation of edible oil distribution and introduction of eligibility criteria. The special PDS was introduced by former chief minister M Karunanidhi on April 14, 2007, to control the prices of essential commodities in the open market, and is fully funded by the state government.
While officials from the Tamil Nadu Civil Supplies Corporation (TNCSC) and the Civil Supplies Commissionerate did not respond to TNIE’s request for comment, a senior official said the government’s subsidy for these two items has more than doubled from Rs 1,800 crore spent in 2014-15.
“When the scheme was launched in 2007, the procurement price of tur dal was Rs 50 per kg and oil was Rs 45 per litre, and these items were sold at Rs 30 per kg and Rs 25 per litre respectively. Since then, the procurement prices have increased manifold but the sale prices have remained the same,” he said.
In January 2023, the TNCSC purchased dal at an average price of Rs 100 to Rs 105 per kg. This increased to Rs 120-Rs 125 from January 2024 due to a price rise in the open market. Last month, the TNCSC reportedly procured dal at Rs 150 to Rs 155 per kg due to higher market prices, incurring several crores of rupees in additional expenses.
Similarly, the average procurement price of edible oil increased from `80 in February last year to Rs 90 in March this year. Consequently, the subsidy (difference between the procurement price and the sale price) provided by the government for tur dal has increased from Rs 20 per kg in 2007 to Rs 120 per kg in June 2024.
