PSF runs dry; DoCA to seek ₹5,400 crore

livemint.com:

₹5,400 crore for its price stabilization fund (PSF) to procure onion and pulses in the rest of the financial year, a government official said. As prices of vegetables and pulses shot up this year, the department began buying them at steep prices and selling them at cheaper rates. Since the department needs to procure more onions and masur (lentil) to enhance the buffer stock, it has decided to move the finance ministry without waiting for a budget allocation.

“We have a requirement of ₹5,400 crore to purchase onion, tur, urad and masur. We generally receive a self-proceed of ₹200-250 crore every month and utilize the revolving fund for the next operation. We bear some losses when a product is being offered at a subsidized rate.

However, when we liquidate stocks, the funds are restored," the official cited above said on condition of anonymity. The FY24 budget had allocated a token of ₹1 lakh for the PSF after no amount was spent from the previous year’s allocation of ₹1,500 crore. “The government is always ready to give the funds as its aim is to build the buffer stock.

We need funds immediately to procure the additional quantity of onion and masur to increase its buffer stock of 600,000 tonnes. We cannot wait for a revised budget allocation as it will take a long time. Even if the RE (revised estimate) allocation is notified 10-15 days prior to the next Union Budget announcement, you cannot use the fund unless it is approved by the competent authority.

We have committed liabilities for procurement," the official added. The department is rarely out of funds, but this year, it purchased huge quantities of chana for ‘Bharat Dal’ and tomatoes, the official said. “This year has been exceptional." The PSF was set up in 2015-16