Both subsidy schemes expire on March 31.
The ministry of food and consumer affairs has recommended for extending the pulses and edible oil subsidy post March 31, 2011.
Besides, for edible oil, the central government also proposes to impose stock limits for states under Essential Commodities Act, said an highly placed official.
“While the initial estimates of pulses production have been good, but this is to combat any unwanted blips resulting into high prices and continue with the scheme for public distribution system (PDS),” said an official. The scheme, proposed in 2008-09 is meant for uninterrupted supply of these essential commodities under PDS irrespective of ruling market prices or prices at which these are imported. Both these subsidy schemes for pulses and edible oil expire on March 31, 2011.
Incidentally, India is a net importer of edible oil especially palm oil and soyoil.
The food ministry has been subsiding pulses and edible oil distribution under PDS by states to the extent of Rs 10 a kg and Rs 15 a litre, respectively.
Incidentally, the agriculture ministry had indicated a record output for 2010-11 according to the second advance estimate for wheat and pulses.
“Since the estimates have been good for pulses, the finance ministry is yet to agree to this move. The food ministry has been insisting for continuing these subsidies for atleast three to six months post expiry to take care of any eventuality in price situation,” sources said.
Since edible oil imports are affected by current high international prices, the food ministry has also urged to continue with zero import duty for crude edible oil and 7.5 per cent duty for importing processed edible palm oil.
According to the second advance estimates of crop output for 2010-11, released by the agriculture ministry, pulses output is likely to touch 16.51 million tonnes.
However, the food ministry has not submitted any proposal for continuing with the subsidy given to trading corporation for importing pulses and distributing it in the open market at a price less than the imported price. Under the subsidy, this loss is compensated to the extent of 15 per cent of difference of local and global prices.
Under PDS, in FY10, the government had increased the amount of pulses to be distributed under PDS from 300,000 tonnes to 600,000 tonnes.
Last year, in order to check pulses prices, the ministry had recommended against raising the minimum support price (MSP) for pulses. MSP acts as a benchmark for the market prices and currently MSP for pulses is the highest. It had also recommended continuation of the ban on export of pulses and duty-free imports. The ban on export of pulses, barring kabuli chana, has already been extended till March 31, 2011.
