PANAJI
While the Centre is working on reforms to enhance the profitability of Fair Price Shop (FPS) dealers across India, the Finance Department in Goa has argued against the proposed "Compensation to FPS Dealers" scheme, warning of consequences for the State government’s fiscal position.
The department has observed that the scheme, which proposes operating expenses of Rs 9,500 per shop monthly apart from enhancing the margins per item, will have additional liability of over Rs 10 crore annually.
In a bid to strengthen the financial position of the 450 FPS operators, the department of Civil Supplies and Consumer Affairs has proposed a special Compensation scheme, under which, waiving of the ePoS rent at Rs 0.10 paisa per kg and adding an ePoS incentive at Rs 105 per ton is proposed.
The scheme, which was mooted in October, 2024 was accorded Administrative Approval by the government in December, last year. However, the Finance Department has declined the proposal.
“The Finance Department finds the scheme fiscally non-viable for the government. It wants the Civil Supplies Department to either redraft the scheme or scrap it,” sources confirmed.
The Department of Civil Supplies was looking at the scheme as a ray of hope for those considering shutting down the FPS. Reeling under financial burden, several hundred FPS dealers have proposed to close down their distribution system and have already approached the government with the same.
As per the proposed scheme, the department has recommended providing monthly operating expenses to the tune of Rs 9,500 per FPS for payment towards wages, electricity, rentals, taxes, thermal rolls, transportation, and handling.
Additionally, the scheme proposes to enhance the cost of rice allocation for Above Poverty Line (APL) (Fortified Rice) from Rs 12.50 to Rs 16.50. Also, the margin commission on rice has been enhanced from Rs 2.80 per kg to 3.15 per kg.
