More than two years after it was first proposed and nearly 18 months after receiving administrative approval from the State government, the long-awaited Compensation to Fair Price Shop (FPS) Dealers Scheme remains on hold, with the Finance Department raising concerns over its financial impact.
The delay has come as a setback for more than 450 FPS dealers who have been seeking financial support as rising costs threaten the viability of running ration shops.
Sources said the Finance Department has objected to the scheme, saying it would place an additional burden of more than Rs 10 crore a year on the State exchequer. The department has reportedly described the proposal as financially unsustainable and advised the Civil Supplies and Consumer Affairs Department to either revise it significantly or drop it.
The scheme was prepared by the Civil Supplies Department to improve the financial condition of nearly 450 FPS dealers and prevent further closures of ration shops. It was proposed in October 2024 and received administrative approval in December 2024, but is still awaiting financial clearance.
“We are reworking the scheme. Dropping it completely would have a negative impact on FPS dealers,” sources said. “We are trying to revise the financial benefits so that maximum support can be provided within the available resources.”
Under the original proposal, each FPS dealer was to receive Rs 9,500 a month to meet operating expenses such as wages, electricity, rent, taxes, transport, thermal rolls and handling charges. The scheme also proposed waiving the ePoS rental charge and providing an additional ePoS incentive of Rs 105 per tonne.
The department had also recommended increasing the price of rice supplied to Above Poverty Line beneficiaries from Rs 12.50 to Rs 16.50 per kg and raising the commission on rice from Rs 2.80 to Rs 3.15 per kg.
The delay is significant as several FPS dealers have informed the government that they intend to close their shops because of mounting losses. To ensure uninterrupted distribution of free foodgrains, the government has already merged 21 such ration shops with nearby FPS outlets.
