New Delhi : The Centre decided to give flexibility to state governments to set retail price of PDS sugar that has been kept unchanged at Rs 13.50 per kg since 2002. The decision in this regard was taken by the Cabinet Committee on Economic Affairs (CCEA), headed by Prime Minister Narendra Modi.
“The CCEA has approved the proposal on PDS sugar price,” a highly placed source told PTI.
Now, state governments will have the flexibility to fix the retail price of sugar, either lower or higher than the existing rate, and bear the cost accordingly.
Sources said that the Centre would continue to give the sugar subsidy for state purchases at Rs 18.50 per kg.
After decontrol of the sugar sector in April 2013, state governments have been asked to buy sugar from the open market to meet the demand under the public distribution system (PDS). The Centre has been subsidising such state purchases up to Rs 32 per kg.
Some states like Gujarat and Kerala have been demanding that the Centre should either increase the subsidy for sugar purchase for this year and share transport cost or give freedom to increase retail price of PDS sugar.
About 2.8 million tonnes of sugar is required for PDS. At present, sugar is sold at the retail issue price (RIP) of Rs 13.50 per kg in ration shops.