Amma Canteens at State govt’s mercy

According to a GCC source, Amma Canteen has been accruing losses of over Rs 100 crore each year. “To continue the operation of Amma Canteen, Chennai Corporation needs Rs 110 crore immediately. Concerned officials have submitted a request before the State Finance Department for assistance,” said a GCC source
Amma Canteens at State govt’s mercy
Amma Canteen

CHENNAI: As a lifeline for the poor and destitute, especially during the COVID-19 pandemic, Amma Canteen filled the stomach of thousands of people in the city. But the very survival of low-cost canteens is a question mark, as it depends on funding from the Tamil Nadu government.

According to a GCC source, Amma Canteen has been accruing losses of over Rs 100 crore each year. “To continue the operation of Amma Canteen, Chennai Corporation needs Rs 110 crore immediately. Concerned officials have submitted a request before the State Finance Department for assistance,” said a GCC source

However, despite huge losses, the quantity of food items sold at the canteens remains constant, as the cost of every dish sold at Amma Canteen is cheaper than the hotel food.

On the other hand, a special purpose vehicle named Amma Canteen Foundation, which was proposed to be constituted during the AIADMK rule, is in limbo. The foundation is yet to be formed, despite a GO issued in January 2021 to form the foundation. As per the proposal, the foundation will collect donations and CSR (corporate social responsibility) fund from corporates to run the canteen across the State.

The importance of the Amma Canteen has been established by a survey conducted by the civic body in 2019, which revealed that around 85% of Amma Canteen customers belong to economically backward families

However, sources at the GCC are doubtful over the effective operation of Amma Canteen with the donations and CSR fund alone, as expenses would be much higher than the potential fund generated.

As per the records, the Chennai Corporation has incurred a loss of more than Rs 700 crore since the scheme launched during the 2013-2014 financial year. Surprisingly, the income from the canteens has been decreasing over the years though the number of canteens was increased to 407 from 207.

The order issued in 2021 (pertaining to the foundation) pointed out that Amma Canteen in Chennai had accrued a loss of Rs 483.75 crore between 2013-2014 and 2018-2019 financial years. While the expenditure for 6 years stands at Rs 668.61 crore, the civic body had managed to earn only Rs 184.86 crore from sales, due to the lower cost of food items being sold at the canteens.

“Food items are being procured at subsidised rates from the State Civil Supplies Corporation. But the canteens are still running on a loss. If the Government sanctions the fund, it will provide a temporary succour. Till now, canteens are being run completely using the Corporation’s fund,” the source explained.

The importance of the Amma Canteen has been established by a survey conducted by the civic body in 2019, which revealed that around 85% of Amma Canteen customers belong to economically backward families. Of the total of 5.38 lakh customers (respondents) covered during the survey, around 8% were students, 7% were senior citizens, 24% were construction workers.

When asked, a senior Chennai Corporation official said that the Government’s intention is to continue the operation of Amma Canteen. “We’ve been told to maintain the canteens in good condition and the Government is in no mood to close them,” he added.

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