India’s Food Minister, Piyush Goyal, introduced ‘Bharat rice’ on Tuesday at a subsidised rate of Rs 29 per kg to alleviate the impact of a 15 per cent increase in retail prices of Rice over the past year.

Subsidized Packaging

This subsidised rice will be available in 5 kg and 10 kg packs.

Distribution Plan

The Food Corporation of India (FCI) will allocate 5 lakh tonnes of rice to two cooperatives, namely the National Agricultural Cooperative Marketing Federation of India Ltd (NAFED) and National Cooperative Consumers’ Federation of India (NCCF), as well as the retail chain Kendriya Bhandar in the initial phase.

Retailing Strategy

These agencies will further package the rice in 5 kg and 10 kg packs and retail them through their outlets under the “Bharat” brand. Additionally, the rice will be sold through e-commerce platforms.

Reason for Retail Sale

The government has opted for retail sale of FCI rice after facing limited interest in selling rice to bulk users at the same rate through the Open Market Sale Scheme (OMSS).

Expectations

The government anticipates a positive response for “Bharat rice,” similar to the reception received for “Bharat atta,” sold at Rs 27.50 per kg, and “Bharat chana,” sold at Rs 60 per kg, through the same agencies.

Inflation Concerns

Despite restrictions on exports and abundant production in 2023-24, retail prices remain unchecked. To address this, the government has urged retailers, wholesalers, processors, and major retail chains to disclose their stocks to prevent hoarding.

Analysis of Inflation

Experts suggest that while the government provides free FCI rice to 80 crore poor ration card holders, the high inflation may not be attributed to FCI rice as the corporation possesses significant stocks and sells grain through OMSS. The inflation is likely stemming from non-FCI varieties of rice, which are less consumed by the poor, thus not accurately reflecting inflationary trends.

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