The Indian government has invested nearly Rs 2,000 crore to distribute Bharat-branded (Bharat Foods) rice and wheat under the Price Stabilisation Fund (PSF) scheme, aiming to curb food inflation and support low-income families by providing essential grains at subsidized prices.
In the interim budget for FY25, the government allocated Rs 2.05 lakh crore for food subsidies, slightly lower than the revised budget of Rs 2.12 lakh crore for FY24 and the expenditure of Rs 1.97 lakh crore for FY23.
Experts believe the government’s efforts to purchase, mill, and sell grains at discounted rates have benefited the poor. Devendra Pant, chief economist of India Ratings, noted, “People at the bottom of the pyramid spend a higher proportion of their income on cereals than those in higher income brackets. Consequently, they experience higher inflation, which slows consumption growth.”
Subsidized Pricing of Bharat Foods
In May 2023, food inflation slightly decreased to 8.69% from 8.7% in April. However, wheat retail inflation rose to 6.5% from 6%, while rice retail inflation eased to 12.3% from 12.5%. Overall retail inflation dropped to 4.75% in May from 4.83% in April.
Since launching Bharat Chawal and Bharat Atta in November, the government has spent Rs 947 crore and Rs 956 crore on these initiatives, respectively. Bharat Atta was introduced at a subsidized price of Rs 27.5 per kg in February 2023, following the scheme’s initial announcement at Rs 29.5 per kg. Bharat Rice was launched in February at Rs 29 per kg amid rising retail prices.
The Food Corporation of India (FCI) provides these staples to three central procurement agencies: the National Agricultural Cooperative Marketing Federation of India (Nafed), the National Cooperative Consumers Federation of India Ltd. (NCCF), and Kendriya Bhandar. These organizations distribute grains via mobile vans, fair-trade shops, and online marketplaces. To date, they have sold 9.91 lakh tons of rice and about 13 lakh tonnes of atta.
The PSF, established in 2014-15 with a Rs 500 crore corpus, aims to maintain buffer stocks to prevent hoarding, protect consumers by providing commodities at reasonable prices, and encourage domestic production through direct purchases from farmers and farmer associations. Initially covering onions, potatoes, and pulses, the PSF now also compensates the FCI for supplying Bharat-branded rice and wheat to the three procurement agencies.
The FCI receives a rebate or discount from the PSF ranging from Rs 435 to Rs 585 per quintal of wheat and Rs 541 per quintal of rice delivered to Nafed, NCCF, and Kendriya Bhandar. This money enables the processing and selling of these grains under the Bharat brand, thereby stabilizing prices and ensuring cheap food for low-income people.
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