With onion prices showing signs of moderation after being on the rise through the past few days, the Centre has directed Mother Diary and other agencies to sell the commodity at about Rs 38 a kg in the national capital and its adjoining areas.
It also urged other state governments to use the price stabilisation fund to sell onions at prices below the market rate.
“We are willing to give state governments Rs 250 crore (Rs 2.5 billion) from the price stabilisation fund to enable them to sell onions at cheap rates,” said a senior official.
“The Centre had set up the price stabilisation fund with a corpus of Rs 500 crore (Rs 5 billion) to enable states to sell onions and potatoes at below-market rates in times of crisis.
The Centre has also decided to give subsidy of Rs 10 a kg on imported tur dal.
Last month, it had ordered the import of about 5,000 tonnes of tur dal.
While the commodity is being imported at Rs 77 a kg, the Centre will make it available to states at Rs 67 a kg.
Officials said the Centre was planning to meet senior officials from state governments on Thursday to find a long-term solution to the onion crisis, as well as discuss other issues related to the marketing of agriculture produce.
Officials said this year, Telengana had applied for a loan of Rs 18 crore (Rs 180 million) from the price stabilisation fund, of which the Centre would contribute Rs 9 crore (Rs 90 million).
On Tuesday, onion prices in the wholesale Lasalgaon market in Maharashtra fell to Rs 48.5 a kg on Tuesday from Rs 57 a kg last week, according to data provided by the Nashik-based National Horticultural Research and Development Foundation.