Cabinet restores PDS sugar subsidy for poorest of poor

The government on Wednesday decided to restore the subsidy for states to ensure sale of 1 kg of sugar at a cheaper rate for 2.5 crore AAY families, the poorest of the poor, under the public distribution system (PDS).

A decision in this regard was taken at the meeting of the Cabinet Committee on Economic Affairs (CCEA) headed by Prime Minister Narendra Modi here on Wednesday.

The sugar subsidy was discontinued with effect from March 2017. The Union food ministry as well as some states had been keen on its continuance for at least families covered under the Antyodaya Anna Yojana (AAY).

The CCEA, according to government sources, has approved a proposal to bring back the subsidy of Rs 18.50 per kg to state governments for selling 1 kg of sugar to AAY families via ration shops.

The subsidy burden on the Centre will be around Rs 550 crore for supplying about 3 lakh tonnes of the sweetener.

In the 2017 Budget, the government withdrew the sugar subsidy and earmarked only Rs 200 crore to clear past claims.

For the last fiscal, Rs 4,500 crore were allocated for the scheme that covered BPL families too.

Under the scheme, states were buying sugar from the open market at wholesale rates and selling at a subsidised rate of Rs 13.50 per kg through PDS. The Centre was providing subsidy of Rs 18.50 per kg to states. The Cabinet on Wednesday also approved promulgation of an ordinance to amend the Banking Regulation Act for resolution of the NPA crisis facing public sector banks, top sources said. PSBs are saddled with non-performing assets or bad loans to the tune of a staggering Rs 6 lakh crore.

Without giving details, Finance Minister Arun Jaitley said the Cabinet has taken some important decisions in respect of the banking sector.

"There is a convention that when some proposal is referred to the President, then details of it cannot be disclosed till it is approved. As soon as approval comes, details will be shared," he said. ITDC to exit 3 hotels, hand over properties to states.

The Cabinet also gave approval to disinvestment of three ITDC hotels at Bhopal, Bharatpur and Guwahati.

Announcing the cabinet decision, Finance Minister Arun Jaitley said that the Indian Tourism Development Corporation (ITDC) would offload its 50 per cent equity in Ashok Bhopal and Brahmaputra Ashok Guwahati in favour of the state governments of Madhya Pradesh and Assam, respectively.

In case of Ashok Bharatpur, ITDC, which is managing the hotel, will hand over the management control to the Rajasthan government.

The states, he added, will have the option to upgrade and operate the hotels by involving private companies or to utilise the properties as per their requirements.