 | « Back to article | Print this article |
Recommends delisting of chana futures, open to lowering sugar import duty
The central government today announced a slew of measures to keep prices of essential commodities under check during the festival months of July to December.
These included recommending delisting of chana from the futures market, favouring a lower import duty on sugar, directing states to rationalise stock holding limits on pulses for millers, producers and importers, and exempting them from value-added tax.
Briefing reporters after a meeting with state food ministers on prices of essential commodities, Union Food Minister Ram Vilas Paswan (pictured) said the government would also consider increasing the size of the pulses buffer stock to 900,000 tonnes from 150,000 tonnes as recommended by a departmental committee.
The meeting also adopted a five-point action plan to contain prices of essential commodities that includes a price stabilisation fund in states.
India’s annual wholesale price index (WPI) for April entered the positive terrain after staying in negative zone for 17 straight months, mainly because of high prices of pulses, sugar, eggs, meat, fish and milk, official data showed. Consumer Price Inflation also rose to a stronger-than-expected 5.39 per cent from 4.83 per cent in the previous month.
A persistent increase in inflation, particularly consumer prices, could refrain the Reserve Bank of India from cutting key policy rates next month.
On chana futures, a senior official said the department of consumer affairs had written a letter to the finance ministry to delist chana from the futures market to stop any speculative trading. Pulses importers might be allowed to stock for 45 days from the date of landing without any limit to give them ample time to dispose inventory.
They will also be encouraged to enter into long-term contracts so that the delay in arrival of imported pulses is reduced. That apart, farmers may be encouraged to purchase land abroad to grow pulses.
Paswan also added the government was considering hiring a private agency to forecast production, demand and price rise to enable it to make timely policy interventions.
Tenders for hiring the agency to monitor prices in retail markets will be finalised next month.
Officials said the agency would be tasked to collect price data from all districts against the current practice of collecting data from 100-odd centres.
Paswan said his ministry would consider lowering the import duty on sugar and banning exports if prices spiked. "We will take all measures to check a price rise in sugar," he said.
Paswan has written to the state governments in Maharashtra, Uttar Pradesh, Karnataka and Tamil Nadu to keep a watch on sugar stocks held by millers.
"Besides pulses, edible oils, sugar and potato, the prices of all other commodities are under control. In the case of pulses, prices are rising due to a demand-supply mismatch," the minister said.
Pulses production is around 17 million tonnes while demand is for 23.6 million tonnes. Although India imported 5.5 million tonnes of pulses in 2015-16, there was still a shortfall of around 1 million tonnes, putting upward pressure on prices, he added.
The minister said pulses importers should display their stock positions on public platforms to bring in more transparency. For this Paswan will approach Commerce Minister Nirmala Sitharaman.
Centre's action on price rise
Pulses
Sugar
Image: A labourer smokes while taking a break from spreading maize crop to dry at a wholesale grain market in Chandigarh. Photograph: Reuters.
