What is the impact of discontinuing sale of rice and wheat to states under OMSS

Examining the effects of the Centre's move to check price rise by discontinuing sale of rice and wheat to states under OMSS.
Here are the impacts of discontinuing the sale of rice and wheat to states under OMSS:
  • The Centre's move to curb the price rise by ending the sale of rice and wheat to states under the Open Market Sale Scheme (OMSS) is likely to affect the food security of the country.
  • The discontinuation of sale of rice and wheat to states under OMSS would mean that the government would sell the grains in the open market, and the states would have to purchase them at market prices.
  • This move is expected to increase the price of grains in the open market, which would further affect the overall inflation levels in the country, primarily if not counterbalanced with increased supply and subsidies.
  • The states which are heavily dependent on the OMSS scheme to meet their food requirements might face significant procurement and distribution issues, leading to a shortage of grains in the state markets.
  • The discontinuation of sale of rice and wheat to states might also lead to distortions in the supply chain, which could further result in the farmers and other stakeholders not getting the optimum price for their produce.
Therefore, while the Centre's move to check price rise is well-intentioned, it must manage the adverse effects of such discontinuation and prevent any adverse impact on the food security scenario.
Answered a year ago
Amrita Preparing for Civil Services