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Foodgrain prices for APL cut 30% to clear stocks

Tara Shankar Sahay in New Delhi

The government on Tuesday reduced by 30 per cent the price of wheat and rice sold under the public distribution system to 'above poverty line' category, in a move aimed at clearing the mounting foodgrain stocks.

The Cabinet also decided to allow the Food Corporation of India to offer up to 2 million tonnes of wheat this year to roller flour mills for export of wheat products.

Announcing the Cabinet decision, Parliamentary Affairs Minister Pramod Mahajan told reporters that the 30 per cent cut would be effective immediately and this temporary measure will be operative up to March 31, 2002. If the surplus stocks got exhausted before this period, the scheme would be discontinued.

Following this decision, the price of wheat for APL will come down by Rs 220 per quintal to Rs 610 per quintal and that of rice would be reduced by Rs 300 per quintal to Rs 830 per quintal.

He said that there would be no change in the prices of wheat and rice for 'below poverty line' category as they were already sold at reduced prices.

Presently, foodgrain prices under BPL were 60 per cent less than the economic cost and in the case of APL, the prices were 30 per cent more than the economic cost.

The Cabinet also raised the ceiling of foodgrain availability for BPL families to 25 kg per month from the present level of 20 kg.

Regarding the sale of wheat to roller flour mills, Mahajan said the cabinet has permitted Food Corporation of India to offer them from the central pool on the condition that wheat products exported by them would not be less than 65 per cent of the quantity lifted.

The base price of wheat for this purpose would be fixed by a High level committee of FCI and 2 million tonnes of wheat would be available for this purpose during 2001-02, he said.

The Cabinet also decided that the Department of Food and Public Distribution would evolve a mechanism to ensure that wheat made available by FCI from the central pool for export was not unauthorisedly diverted.

Mahajan said there was no proposal at this point of time to supply foodgrain free of cost to get rid of the surplus stock.

The 30 per cent reduction in foodgrain prices will enable people in APL category to get wheat and rice at Re 1 less than the market price per kg.

This measure had been taken as there was excess foodgrains stock of 60.4 million tonnes as against the buffer stock requirement of 15.8 million tonnes. Besides foodgrain procurement this year is likely to be 22 million tonnes.

Ratification of amendment to Intelsat agreement approved

The government also approved the ratification of amendment to the International Telecommunications Satellite Organisation (Intelsat) agreement as the agency intends to commence operations as a private company from July 18.

Announcing the decision, Mahajan said that the Union Cabinet had also decided to transfer the Rs 2.55-billion investment of Videsh Sanchar Nigam Ltd in the agency to the privatised Intelsat.

Privatisation of Intelsat would ensure commercial flexibility to create value for its customers besides raising its revenue from $1 billion in 2000 to $4.2 billion by 2009, he said.

Intelsat, headquartered in Washington, has a representation of 145 countries and is currently undergoing restructuring exercises whereby it will be recast to invite private participation.

However, there would be a supervisory intergovernmental organisation to be known as International Telecommunications Satellite Organisation.

Intelsat's objective is to design, develop, construct, establish, operate and maintain the space segment of global commercial telecommunications satellite system.

Govt nods TCIL's participation in UTL Nepal

The government approved an investment of $9.05 million by Telecommunications Consultants India Ltd to participate in a joint venture company to provide basic telecom services with limited mobility in Nepal.

Briefing reporters about the decision of the Union Cabinet, Parliamentary Affairs Minister Pramod Mahajan said TCIL would have 26.66 per cent equity in United Telecom Ltd Nepal, to be financed from its internal sources.

A consortium of four companies including TCIL, Mahanagar Telephone Nigam Ltd, Videsh Sanchar Nigam Ltd and Nepal Ventures Private Ltd, a local Nepalese company, was formed for bidding in the tender under the name of UTL.

Mahajan said the tender condition required a minimum 20 per cent stake of the bidder consortium to be held by a Nepalese company where by NVPL will hold 20 per cent, VSNL and TCIL 26.66 per cent each and MTNL 26.68 per cent.

The Nepal government had invited global bids for issuing licences to operate WLL-based basic telecom services for an initial period of 10 years and a maximum period of 25 years.

The Cabinet also approved TCIL's submission of corporate guarantees, bank guarantees and other comforts proportionate to its equity stakes to lenders of loan or facilities or the Nepal government or any other agency as may be required.

Restructuring of Customs & Excise dept gets nod

The Cabinet also approved the restructuring plan for Customs and Central Excise Department aimed at raising revenue collection by 5 per cent and reducing staff strength by about 3,600.

Mahajan informed that the basic intention was to improve productivity and effectiveness of the department, which would now have more commissionerates and divisions for speeding up revenue collection.

While the number of commissionerates in the Excise department would be increased from 59 to 92, the number of its divisions would be raised from 330 to 460.

The Customs department would now have 35 commissionerates instead of 25 at present, he said.

The Cabinet also decided to provide 54 additional posts of Commissioners (Appeals) to tackle the huge pendency of cases numbering over 38,000.

Out of a total staff strength of 58,000, Mahajan said its number would be reduced by about 3,600. He said there was no provision for introducing voluntary retirement scheme for the surplus staffers.

In the last fiscal, the total revenue collection stood at Rs 1,150 billion compared with Rs 400 billion a decade ago.

The annual rate of growth in revenue collection was 10 per cent for central excise and 13 per cent for customs duty, which led the government to go in for restructuring, he said.

Additional inputs: PTI

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