The Price Stabilization Fund (PSF) is a government initiative that was established during the fiscal year 2014-15. Its primary purpose is to regulate the price volatility associated with essential agricultural commodities, including pulses, onions, and potatoes, by maintaining adequate buffer stocks.
The PSF was created to stabilize market prices, ensuring that essential commodities remain affordable for consumers while protecting farmers from the adverse effects of sudden price hikes or shortages.
For the fiscal year 2026 (FY26), the budgetary allocation for the PSF is projected to increase by 3%, raising the total allocation to ₹10,300 crore. This increase aims to bolster the procurement of key food items such as pulses, onions, and potatoes.
The PSF aids farmers by guaranteeing fair prices for their produce through effective procurement mechanisms. By encouraging domestic production, it reduces reliance on imports and allows farmers to sell surplus produce at discounted rates.
In September 2024, the government merged the Price Support Scheme (PSS) and the Price Stabilization Fund (PSF) under the PM-AASHA (Pradhan Mantri Annadata Aay Sanrakshan Abhiyan) scheme. This initiative also incorporates the Price Deficit Payment Scheme (PDPS) and the Market Intervention Scheme (MIS).
India’s pulse production has been on a decline, which poses challenges to the nation’s goal of achieving self-reliance in pulses by 2027. Funds from the PSF are allocated for the procurement of various pulses, including chana, tur, masur, urad, and whole chana, helping stabilize prices and reduce import dependence.
Pulse production has seen a decline from 27.3 million tonnes in FY22 to 26 million tonnes in FY23, and further down to 24.5 million tonnes in FY24. This downward trend highlights the ongoing challenges in attaining self-sufficiency in pulses.
The Centre has set a target to procure 475,000 tonnes of onions for FY25, following a decrease in onion production from 31.6 million tonnes in FY22 to 24.2 million tonnes in FY24.
Bharat Dal is a government initiative that sells discounted pulses procured under the PSF, ensuring affordability for consumers while simultaneously supporting farmers.
The PSF plays a crucial role in maintaining stable prices by procuring and releasing buffer stocks during times of shortages or price surges. Additionally, the discounted sales of onions and tomatoes in retail markets help alleviate inflationary pressures.
The fund is managed by the Department of Consumer Affairs, which receives allocations in the Union Budget to ensure the effective implementation of price stabilization measures.
The overarching aim of the PSF is to achieve food security by stabilizing prices, reducing import dependency, and incentivizing farmers to increase the cultivation of essential commodities through 100% procurement initiatives.
Kutos : AI Assistant!
