Open Market Sale Scheme (OMSS) by Food Corporation of India

Recent Changes to OMSS by Central Government:

• Restriction on Quantity: The Centre recently reduced the maximum quantity that a single bidder can purchase under the OMSS. 
• Excluding States from OMSS: In June 2023, the Central Government stopped the sale of rice and wheat under the OMSS to the state government.

Reactions from the States

• Impact on State Schemes: Many states have criticized the Centre’s actions for impacting their own welfare schemes. Example: In Karnataka and their Anna Bhagya scheme
• Alternative Procurement Strategies: Tamil Nadu is looking to procure rice from agencies other than the FCI. 
• Legal Fight: Kerala is planning legal steps against the Centre’s overall food distribution policy.

Way Forward:

• There is a need for more transparency in the functioning of the OMSS, including pricing and allotment mechanisms and encouraging states to diversify their public distribution system food baskets.
• Encouraging more players in the open market such as small and marginal buyers will foster competition and help in better price discovery.