New Delhi: The government is likely to increase the allocation for the Price Stabilisation Fund (PSF) by 80 per cent to Rs 900 crore in the budget for 2016-17 in a bid to protect consumers from increase in prices of essential food items.
The PSF, announced in the previous budget with a corpus of Rs 500 crore, was initially being handled by the Agriculture Ministry. It used funds to intervene in the market to boost supply of onion and pulses to check price rise.
Since the purpose of the PSF was to protect consumers, the fund was recently shifted to the Consumer Affairs Ministry, which will monitor it from April 1.
"The plan allocation for the Consumer Affairs Ministry is expected to cross Rs 1,000 crore in the 2016-17 fiscal with the shifting of PSF here. The allocation for PSF itself is likely to increase to Rs 900 crore from Rs 500 crore last year," a source said.
The PSF corpus would be used for conducting various programmes to protect consumers from price rise and other consumer welfare activities, they added.
The fund would continue to be used this year for importing pulses as the output is expected to be lower at 17.33 million tonnes against the demand of 22-23 million tonnes. Already, state-owned MMTC has floated two 'tur dal' import tenders.
The fund will continue to be utilized for procurement of pulses for creating buffer stock, which will be offloaded in the market to curb price rise. Already, more than 35,000 tonnes of pulses has been procured by FCI and other agencies from kharif crop. The procurement of rabi pulses will also begin shortly.