Faced with criticism over rising food prices, the government today announced a series of measures aimed at improving the availability of sugar, pulses, wheat and rice.
The government has allowed processing of around 900,000 tonnes raw sugar contracted by Uttar Pradesh (UP) sugar mills in other states, since the UP government has banned import of raw sugar.
“The UP government had been requested a number of times to lift these restrictions but to no avail...the government has provided relaxation in central excise rules to enable processing of this sugar by mills located in other states,” Union Food and Agriculture Minister Sharad Pawar said today.
The government has also extended by nine months the zero import duty on refined sugar to December 31. The import of raw sugar is already allowed at zero duty till the year-end.
Replying to questions on the impact of the decisions, Pawar said sugar prices had come down in the last two days by Rs 3 a kg and would ease further as the availability would improve. He said 5.64 million tonnes (mt) of sugar have been contracted so far, taking the total availability to 24.1 mt, more than the annual requirement of 23 mt.
Some state governments have imposed the value added tax (VAT) on imported sugar, thereby adding to cost. The states have been categorically advised to remove such VAT or any other tax on imported sugar.
State governments have also been advised to ensure strict enforcement of anti-hoarding measures on sugar under the powers of the Essential Commodities Act. The home ministry will reiterate instructions to forces guarding borders to check smuggling of sugarcane and sugar.
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Pawar was briefing the media after a meeting of the cabinet committee on prices (CCP). Sources said Pawar faced some tough questions from I&B Minister Ambika Soni and Railway Minister Mamata Banerjee in the meeting. Both of them questioned Pawar on why he was so late in announcing these measures. Banerjee even thumped the table and said the government must bring down the prices immediately.
Open market release of grains
The government will release 2-3 mt of wheat and rice in the open market over the next two months, which needs to be sold through state agencies to retail consumers. This is over and above the allocation made under the public distribution system.
The government would also try to impress upon the states to lift wheat and rice allocated to them under the Open Market Sales Scheme as the response so far has been very poor.
Involving government outlets in improving availability
In order to provide immediate relief to the common man, the Centre has decided to rope in cooperative major Nafed and National Consumer Cooperative Federation (NCCF) to distribute wheat, rice, pulses and edible oils through their outlets. “Up to 500,000 tonnes of wheat and 200,000 tonnes of rice will be distributed through Nafed and NCCF outlets to ensure that the benefit reaches retail consumers,” Pawar said.
The government has asked Nafed and NCCF to sell subsidised imported edible oils and pulses in states which are not implementing the central scheme. The Union government is giving a subsidy of Rs 15 a kg and Rs 10 a kg on edible oil and pulses, respectively, for supply through ration shops. Public sector agencies such as MMTC and STC have been asked to intensify pulses import from all sources.
Involving state governments
Prime Minister Manmohan Sigh has called a meeting of chief ministers later this month to discuss the situation of food prices and review the implementation of the Essential Commodities Act to prevent hoarding of essential food items.
Elaborating on the meet, Pawar said states would be asked to play an active role in containing prices through effective measures by using the powers under the Essential Commodities Act. “This issue will be reviewed in the conference of Chief Ministers”.