The ministry of food and consumer affairs has extended the pulses subsidy for one more year, till March 31, 2012.
Officials said the edible oil subsidy will also be rolled out for one more year. However, final notification is yet to be issued. Both these subsidy schemes, for pulses and edible oil, expire tomorrow. Stock limits for another year have also been imposed on both commodities.
The food ministry has been subsiding pulses and edible oil distribution under the public distribution system (PDS) by states to the extent of Rs 10 a kg and Rs 15 a litre, respectively. The difference between the market price and the price of PDS is compensated to states through these subsidy schemes.
“Since pulses and edible oil, are both essential commodities and India depends heavily on imports for both, the central government has also decided to impose stock limits for both in the states under the Essential Commodities Act,” said an highly placed official.
Imposing stock limits and monitoring these is under the purview of individual states while the “in principle” direction is given by the Centre.
“While the estimates of pulses production have been good, these measures are aimed at combating any unwanted blips resulting into high prices and therefore, continue with the scheme for PDS,” said an official.
Since edible oil imports are affected by the current high international prices, the food ministry in consultation with the finance ministry has also decided to maintain status quo on the duty structure for edible oil imports. Currently, there is zero import duty for crude edible oil and 7.5 per cent duty for importing processed edible palm oil.
The Director General of Foreign Trade ( DGFT) has also extended the ban on export of pulses for one more year, till March 31, 2012.
The scheme of subsidy for pulses and edible oil 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.
India is a net importer of edible oil, especially palm oil and soyoil. The agriculture ministry had indicated a record output for 2010-11. According to the second advance estimate, pulses output is likely to touch 16.51 million tonnes.
Under PDS, in 2009-10, 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. It had also recommended continuation of the ban on export of pulses and duty-free imports.
