States look for alternatives as Centre restricts FCI purchase

Source: The post is based on the article “States look for alternatives as Centre restricts FCI purchase” published in The Hindu on 19th June 2023

What is the News?

The Central Government has recently announced its decision to reduce the quantity of foodgrains a bidder can purchase under the Open Market Sale Scheme (Domestic).

After this, several States have started taking steps to ensure the supply of foodgrains is distributed under the Public Distribution System but not covered under the National Food Security Act.

What is an Open Market Sale Scheme(OMSS)?

Under the Open Market Sale Scheme, the Food Corporation of India (FCI) sells surplus stocks of wheat and rice at pre-determined prices through e-auction in the open market.

Aim: To enhance the supply of food grains, especially wheat, during the lean season and thereby moderate the open market prices, specially in the deficit regions.

What has the government announced about OMSS?

The Central Government has reduced the quantity of foodgrains a bidder can purchase under the Open Market Sale Scheme.

It has been decided that the quantity that a bidder can purchase in a single bid under the OMSS(D) from the Food Corporation of India (FCI) will range from 10-100 tonnes. 

Earlier, the maximum quantity allowed was 3,000 tonnes per bid for a buyer. 

The government has said that this has been done to curb inflation and to accommodate more small and marginal buyers and to ensure wider reach of the scheme.