KOCHI: The Kerala Civil Supplies Corporation (Supplyco), with 1,406 retail outlets across the state to sell essential commodities to the public at subsidised prices, is failing in its objective, says a new study released here on Tuesday. While the Consumer Price Index (CPI) for food has increased by 50.61 per cent in Kerala from 2012 to 2017, at the national-level, the CPI rose by lower 37 per cent during the same period. "It means that a food commodity that had cost Rs 100 in 2012 will cost Rs 150.61 in 2017 in Kerala, while at the national level it would cost Rs 137," says the study by Centre for Public Policy Research (CPPR).
"The comparative outcome on the CPI shows the poor results from the Supplyco," says Nimish Sany, research assistant, CPPR, who led the study.
The study finds that food inflation in the state could also be a result of many other factors in the economy such as Minimum Support Prices (MSP) or agricultural wages. Therefore, to arrest food inflation, an overall strategy taking into account all such factors is necessary. These are well beyond the ambit of Supplyco's operations, said CPPR.
"Supplyco’s retail chain model where certain subsidised commodities are sold at lower prices through its outlets across Kerala is not simply capable of controlling the rise in price of essential commodities," reckons Sany.
The study reveals that the Supplyco’s share in Kerala’s consumption of those commodities is near negligible. Even the quantity of coconut oil, which is the most sold and preferred item at Supplyco outlets, distributed through 1,406 outlets across Kerala contributes only 2.52 per cent of Kerala's total consumption demand. Similarly, for other most-sold items, the majority of the demand is met by the market outside Supplyco.
The CPPR study also reveals the poor financial performance of the Supplyco by evaluating many financial factors. The grants given by the government never suffice for the loss incurred by Supplyco in its Market Intervention Scheme (MIS) operations for the government. "This brings to light Supplyco's economically unsustainable model of financing," it says.
To transfer the intended subsidy benefits worth Rs 121.60 per person per month, the government spends an additional Rs 61 per person per month for running the Supplyco.
1406 Supplyco retail outlets across the state to sell essential commodities
A commodity sold at Rs 100 in 2012 to cost Rs 150.61 in 2017 in Kerala versus the national average of Rs 137.
To transfer intended subsidy benefits worth Rs 121.60/person/month, Kerala spends an additional Rs 61/person/month