INDIA TO RESTRICT PDS GRAIN ALLOCATIONS
India's Cabinet Committee on Economic Affairs will review a proposal to a) reduce the Public Distribution System (PDS) allocation of food grains and b) raise the PDS price of wheat and rice.
The move would save about 3.0 million tons of wheat that will help cover the shortfall in wheat buffer stocks. The justification for the proposed price hike is to close the gap in PDS vs. open market prices in order to plug illegal diversions.
The hike is also expected to save the GOI Rs. 50 billion ($1.1 billion) in subsidies. The government may ban wheat and rice exports, and close its “open market sale scheme” for domestic bulk consumers.
It may also restrict the food grains allocation in some welfare plans by asking the Finance Ministry to replace food grains with cash.
United States Department of Agriculture Foreign Agricultural Service