The Central Government’s recent decision to scrap the subsidy on sugar could result in a burden of Rs. 250 crore per annum from the 2017-18 financial year beginning April, if it is to continue the supply of subsidised sugar.

 

The government is mulling over options to supply subsidised sugar. Besides asking the Centre to continue to share the burden of subsidy, the State is thinking of increasing the price of sugar sold at fair price shops (FPS) from Rs. 13.50 per half a kg to Rs. 20, sources said.

 

The State government is now purchasing sugar form open market through e-tenders. The government distributes half a kg of sugar to each cardholder per month at a price of Rs. 13.50 per kg. The subsidy used to be borne by both Central and state governments. The Centre used to share Rs. 10.53 crore per month and the State Rs. 10.41 crore. The Central government used to reimburse subsidy at the rate of Rs. 18,500 per metric tonne (MT), sources say. The net requirement of sugar in the State is 7,040 MT per month. Due to scrapping of subsidy by the Centre, the government will have to shoulder the burden of Rs. 20.94 crore per month.

 

The requirement goes up during special occasions like Ramzan when Government distributes RamzanTohfa (gift). Under the scheme, the government supplies 2-kg sugar to Muslim BPL cardholders. The expenditure will touch Rs. 8.69 crore for subsidised sugar under the Tohfa. The government distributed 2,200 MT of sugar during Ramzan last year and expenditure would be on similar lines for this year Ramzan too, sources say. Civil Supplies Director G. Ravi Babu said that Chief Minister N. Chandrababu Naidu has directed officials to supply subsidised sugar as usual this month. The Centre used to provide a subsidy of Rs. 20 per kg and the burden is Rs. 250 crore per annum, he said.