The food ministry has proposed several steps to tackle the high prices of essential commodities, on fears of a shortfall in the production of crops and their delayed arrival.
It is considering extending the limit for holding pulses and edible oil stocks for another year, starting October. Officials, however, clarified the stock holding limit might be announced along with a revamp of the subsidy scheme. They added the stock holding limit may also be extended to rice.
To quell the rising prices of sugar, the ministry has decided to release additional sugar in the market, under the non-levy category; even as the levy quota of 10 per cent would remain intact. Sugar exports have virtually been halted, owing to the price differential between global and domestic markets. Currently, domestic prices stand at Rs 33-34 a kg.
The ministry also plans to subsidise the distribution of pulses and edible oil, under the Public Distribution System. Currently, there are two schemes through which these commodities are procured. First, the National Co-operative Consumers Federation of India (NCCF), which distributes pulses and edible oil at a subsidised rate to the Public Distribution System. For this, NCCF is reimbursed 25 per cent of the procurement cost. The second scheme is one through which the National Agricultural Cooperative Marketing Federation of India (Nafed) procures and distributes pulses, for which it is reimbursed 15 per cent of the procurement cost. As both schemes don’t ensure the agencies recover their cost of procurement and distribution, the ministry, along with Nafed, wants a change.
Due to the erratic monsoon at the beginning of the kharif season this year, most pulses and oilseeds crops would either see a shortage or a delay in arrival. In both cases, prices are expected to remain firm. The government has already allowed the import of pulses and edible oil.
So far this kharif season, acreage for pulses remained low, at 8.83 million hectares, compared with 9.97 million hectares in the year-ago period. Acreage for oilseeds stood at 16.42 million hectares, against 16.99 million hectares in the corresponding period last year.
In the last three years, India imported about 2.5-3.5 million tonnes of pulses and about eight to nine million tonnes of edible oil. Edible oil is usually imported from Indonesia, Malaysia, the US and Argentina, pulses are primarily imported from Myanmar, Australia and Canada. Meanwhile, the government has already waived off the import duty on all varieties of oilmeal cakes.