Budget impact: Focus on building buffer stocks of onions, pulses

NEW DELHI: The Budget has allocated Rs 2,700 crore to the price stabilisation fund (PSF) for 2021-22, which will be used to create buffer stocks of onions and pulses to check price volatility in these commodities. This is 35% more than the allocation of Rs 2,000 crore in the last budget but 77% less than the actual expenditure of Rs 11,800 crore in 2020-21.

The PSF will also be used to fund states that are looking to create their own PSFs.

“In 2020-21, the expenditure went up astronomically due to free distribution of pulses to 200 million poor families under Pradhan Mantri Garib Kalyan Yojana (PMGKAY) during Covid-19 pandemic. Apart from that, government created buffer stock of 99,000 tonnes of onions,” said a senior consumer affairs ministry official. “In the next fiscal, the Budget allocation is down from actual expenditure but up by 35% from last budget allocation.”

The official said the government is planning to procure 50% more onions next year to tide over the period when there is short supply of onions.

“We will start procuring onions from March-April for the buffer stock. Onions produced in winter are better suited for storage. In 2020-21, 25,000 tonnes of onions in buffer stock got damaged due to moisture loss,” the official said.

He said the government also created buffer stock of 2 million tonnes of pulses, which were distributed to control prices. It was also used for free distribution during the pandemic.