Context: 

GoI has Extended the Sugar subsidy scheme for Antyodaya Anna Yojna (AAY) families distributed through the Public Distribution Scheme (PDS) until 31 March 2026.

 Sugar Subsidy Scheme for Antyodaya Anna Yojna Families

• It benefited about 1.89 crores Antyodaya Anna Yojna families of the country.
• GoI Rs. 389 Cr. was released as a sugar subsidy in 17 states during FY 2023-24.
• Objective Behind Extension of Sugar Subsidy : 
• For the well-being of the citizens of the country and ensuring the sweetness of platter of the poorest of the poor in the country
• To add energy to their diet so that their health improves.

Antyodaya Anna Yojana (AAY)

• Launch Date: 25th December 2000.
• Nodal Ministry: Ministry of Consumer Affairs, Food, and Public Distribution.
• Statutory Backing : It is a part of the National Food Security Act 2013.
• Objective: To provide highly subsidized food grains through the Targeted Public Distribution System (TPDS). 
• Salient Features: All AAY beneficiaries receive subsidized food and essential commodities through the Targeted public distribution system.
  • Wheat is provided at Rs.2 per kg, and rice at Rs.3 per kg, Rs.1 per kg for coarse grains
  • Eligible families are entitled to receive 35 kg of rice per month. & 
  • 1 kg of sugar at a subsidized rate of Rs.18.50 per kg through ration shops.
• Identification : The Central and State Governments of India jointly identify AAY beneficiaries. Upon identification, AAY families are issued ration cards of a distinct “Yellow” color. 
• Eligibility
  • Agricultural laborers without land, marginal farmers, and rural artisans. 
  • Individuals living alone who are either widows or facing terminal illnesses.
  • Widows and family heads over 60 years can apply. 
  • Families falling below the poverty line can apply.
  • Families with an annual income below Rs.15,000 are eligible. 
  • Tribal families residing in rural and mountainous areas qualify for the scheme. 
  • Disabled individuals are eligible to apply. 
• Allocation of Food Grains: Monthly food grain allocation under the Antyodaya Anna Yojana is approximately 8.51 lakh tonnes.

Concerns Associated With Food Subsidy in India

• Rising Economic Cost of Food Grains: 
  • The increase in Minimum Support Prices (MSPs), high state-level levies, and rising distribution costs contribute to the economic cost escalation of food grains. 
  • The widening gap between economic cost and Central Issue Prices (CIPs) results in increased expenditures on food subsidy. 
• Faulty Cropping Pattern: Open-ended procurement of paddy and wheat in states like Punjab and Haryana disrupts cropping patterns, displacing essential crops like pulses and oilseeds. 
• Excessive Stockholding: Monocropping of paddy and wheat leads to excessive stockholding beyond the required norm, contributing to post-harvest losses. 
• Environmental Impact: The increasing trend in MSPs influences farmers to opt for water-intensive crops, putting pressure on the water table, especially for crops like paddy and sugarcane. 
• Challenges in Delivery of Food Subsidy: Inclusion & Exclusion Errors while identification of beneficiaries.
• Sugarcane Dues: 
  • Surplus production leads to falling sugar prices, impacting the liquidity of mills and causing delays in payments to farmers. 
  • State governments setting prices higher than the central government’s Fixed Remunerative Price (FRP) adds strain to the financial health of sugar mills.

Also Read: Pradhan Mantri Garib Kalyan Anna Yojana 

News Source: PIB