Tamil Nadu government is planning to set up a first-of-its-kind Rs 50-crore price stabilisation fund. The fund will be constituted immediately and will extend interest-free financial support to co-operative societies for market intervention.
In his address to the 14th Assembly session last week, Tamil Nadu Governor Surjit Singh Barnala said this would enable the co-operatives in the state to procure select commodities at the time of abnormal price rise and sell them through co-operative outlets at cost price to the public.
In a reply to a question in the Assembly on Tuesday, chief minister J Jayalalithaa said, "Rs 50 crore is just a corpus. If we want, we will infuse further [capital]."
The Governor said essential commodities being supplied through public distribution system (PDS) are rice, wheat, sugar and kerosene. The monthly offtake of rice under the PDS is 317,000 tonnes, that of sugar is of the order of 33,055 tonnes and actual requirement of kerosene is 65,140 kilo litres per month.
The state government introduced special PDS with effect from April 14, 2007, in Chennai city and with effect from May 1, 2007, in other districts. Under this system, the Tamil Nadu Civil Supplies Corporation procures essential commodities like tur dal, urad dal and palmolein in the open market for supply under special PDS.
The Governor also said that besides taking stringent action against hoarding and black-marketing, the government would strengthen the Public Distribution System. As a long-term measure to control prices of essential commodities, the government would take up intensive measures to increase production and productivity of the commodities.
The state government is already incurring substantial expenditures by way of food subsidy, he said. From Rs 734.85 crore in 2003-04, the subsidy increased to Rs 1,017.78 crore in 2004-05, Rs 1,559.64 crore in 2005-06, Rs 1,833.02 crore in 2006-07, Rs 1,961.06 crore in 2007-08, and Rs 2,795.85 crore in 2008-09. During 2009-10, Tamil Nadu had to enhance the subsidy to Rs 4,000 crore.
The previous Dravida Munnetra Kazhagam (DMK) government had also floated the idea of establishing such a fund on various occasions, including in October last year, when former deputy chief minister M K Stalin proposed it at a meeting of the working group on consumer affairs.
