Delhi govt doubles the margin money paid to fair price shops

In an effort to improve the financial viability of 2500 Fair Price Shop (FPS) dealers across the city, Delhi government has doubled the margin money from Rs 35 per quintal to Rs 70 per quintal on wheat and rice sold through Public Distribution System (PDS).
There was a demand from the FPS licencees for enhancement of margin money as it was fixed in 1997 and has not been revised since then.
"The margin money is payable to the FPS licencees for handling of foodgrains, rent of shops, wages, electricity charges, stationery and other miscellaneous expenses for running the shop," explained S S Yadav, Commissioner cum Secretary, Food Supply Department.

Yadav said that the enhancement will be effective from the allocation of the month of September.
"Low margin money was making it difficult for FPSs licencees to run the shops. The decision of the Lt Governor has come as a big relief to the 2500 FPSs across the city," Yadav said.
Margin money on the foodgrains supplied under the National Food Security Act 2013 is to be paid by Delhi government.

The highly subsidized foodgrains under the Act are supplied to about 11 lakhs ration card holders belonging to Antodaya Ann Yojana, Below Poverty Line, Jhuggi Ration Card and Resettlement Colony Ration Card and National Food Security Card holders.

"In case of ration sold to 4 lakhs Above Poverty Line (APL) card holders the margin money will be paid by the ration card holders themselves," Yadav said.
The decision will cost the Government of Delhi an extra financial burden of Rs 10 crores. The financial burden will go up with addition of about 5 lakhs householders under the Food Security in next two months.
After the current revision, the margin money paid to the FPS licencees in Delhi has become one of the highest in the country.
Yadav said, "FPS dealers are important link in supply chain of PDS and play crucial role in effective delivery of PDS commodities to the beneficiaries. It is essential for smooth functioning of Public Distribution that FPSs are economical viable and reasonable rate of return are assured to the dealers.

Recently, the Delhi Government has completely liberalized its policy regarding items allowed to be sold from FPSs allowing them to sell all goods and services except 8 categories of prohibited items.