6-point action plan to
check price rise
NAFED to procure,
supply more onion
Tribune
News Service
NEW DELHI, Oct 31 —
Duty free import of pulses, abolition of 4 per cent
special import duty on vanaspati and direction to NAFED
to increase procurement and supply of onion are part of a
six-point action plan announced by the Centre today to
contain prices of essential commodities.
A meeting of a group of
union ministers chaired by the Prime Minister, Mr Atal
Behari Vajpayee, here also decided to ask the states to
step up anti-hoarding measures to make additional
supplies of essential commodities available in the
market.
It was also decided that
the Cabinet Committee on Price and a committee headed by
the Cabinet Secretary will meet every week to review the
price situation and take remedial measures.
The states will be
advised, wherever necessary, to deregulate the cold
storage chains to enable storage of surplus perishable
commodities.
The meeting was attended
among others by the Finance Minister, Mr Yashwant Sinha,
the Commerce Minister, Mr Ramakrishna Hegde, the Industry
Minister, Mr Sikander Bakht, the Union Food and Civil
Supplies Minister, Mr Surjit Singh Barnala, the Deputy
Chairman of the Planning Commission, Mr Jaswant Singh,
the Minister of State for Agriculture, Mr Sompal, and the
Defence Minister, Mr George Fernandes. The Union Home
Minister, Mr L.K.Advani, who was an invitee, could not
attend the meeting. Apart from the Cabinet Secretary and
the officials connected with these ministries, the Lt.
Governor of Delhi, Mr Vijai Kapoor,also attended the
meeting.
It was also decided that
the group of ministers would meet from time to time to
review the developments on the economic front and it
would be a permanent mechanism.
Briefing newspersons on
the outcome of the meeting, the Finance Minister, Mr
Yashwant Sinha, said the increasing prices of onion
figured prominently in the discussions. It was felt that
the Government should make efforts to procure greater
quantities of vegetable from all possible sources, in the
country and abroad. While NAFED has been asked to
increase procurement of onion and boost its supplies in
the country, the Minister of State for Agriculture has
been authorised to get in touch with states where surplus
onion is available and negotiate further procurement.
The availability and
prices of pulses was also discussed at the meeting. The
Department of Civil Supplies indicated that the shortfall
in supplies of the essential commodities was around two
million tonnes. To augment supply of pulses in the
country, the meeting decided to lift the import duty on
pulses and make their imports duty free. The government
had earlier put import of pulses under the open general
licence (OGL) list and this coupled with the abolition of
import duty is expected to result in greater supplies
from abroad.
Mr Sinha said while arhar
dal was a commodity available only in India, the
Government was exploring the possibility of importing
masoor and urad in large quantities to ease the pressure
on arhar dal. India’s production of pulses has been
stagnant for the past 30 years at around 13 to 14 million
tonnes. With the increase in population the per capita
availability of pulses today is around one-third of what
it was 30 years ago.
The import market for
pulses is also marginal and India can hope to import a
maximum of eight to nine lakh tonnes from its traditional
sources which includes, Myanmar, China, Turkey and
Hungary.
To enhance supply of
vanaspati in the local market, the Government has decided
to give added incentive to importers and to abolish the
existing 4 per cent special import duty on the edible
oils.
Hoarding, which is
considered to be one of the main contributing factors to
the price spiral, also figured in the discussions. The
Prime Minister would be writing letters to all Chief
Ministers requesting them to step up anti-hoarding
measures.
Mr Sinha explained that
the Centre had no power to take action under the
Essential Commodities Act as it was a State subject. It
was for the states to include commodities hit by price
rise in the ECA and take suitable action against
hoarders.
He said the Cabinet
Secretary had already taken up the issue at the official
level and the Union Food Minister, Mr Surjit Singh
Barnala, and the Union Cabinet Secretary would call a
meeting of Chief Secretaries of all states on November 7
to review the action taken by state governments with
regard to dehoarding and anti-hoarding operations.
As a long term plan to
prevent recurrence of such shortages, the meeting also
decided to advise the state governments, wherever
necessary, to deregulate the cold storage chains. Mr
Sinha said several states had levied high charges for
operation of cold storage chains and this was acting as a
damper for creation of new capacities. Cold storage
chains in large numbers would enable storage of
perishable commodities in years when there is a surplus
and this in turn could be supplied in times when there is
a shortage. Creation of cold storage facilities would
also remove the uncertainty faced by the farmers, Mr
Sinha said.
On the supply of potatoes,
Mr Sinha said the Prime Minister has spoken to the Chief
Minister of Uttar Pradesh, where large supplies are
available in cold storage. The Uttar Pradesh Chief
Minister has convened a meeting today to increase supply
of potatoes to Delhi and other places where there is a
shortage.
It was pointed out at
today’s meeting that as far as wholesale prices were
concerned, there had been a marked increase in the
primary articles group. The other two categories —
fuel, power light and lubricants and manufactured
products — had gone up only marginally.
Prices of food items which
form a bulk of the primary article groups had increased
significantly. As on April 4 this year, the wholesale
price index for this group was 352.4 points while on
April 17 it was 392.4 points, an increase of 12.8 per
cent. On a year to year basis the increase worked out to
15.8 per cent. In the corresponding period last year, the
increase was only 3 per cent.
Mr Sinha denied the charge
that the government had been slow in reacting to the
crisis on the price front. He said the Centre was
confident that the arrival of kharif crops would ensure
increased supplies and soften the prices. However, two
spells of unseasonal rains in several parts of the
country had interrupted production. Supply of onion was
hit the most as by this time large quantities should have
arrived from Maharashtra.
Mr Sinha said there were
reports that several truckloads of onion had left
Maharashtra, but they were held up enroute due to rains.
Once the farms dry, the farmers would be able to procure
more onion and the situation should ease in a couple of
weeks.
The expectation of higher
kharif arrivals was also one of the reasons that led to
the government delaying a decision on banning export of
onion, Mr Sinha said. He said exports of any commodity
could not be shut off and on at will as it affected the
country’s reputation in the international market.
Moreover, Mr Sinha
explained that onion contracted for export was of a
special variety and it was not much in demand in India.
"We are doing
whatever is possible within the powers of the government.
We are hopeful that the measures already taken and the
fresh steps announced by the government will considerably
improve prices", Mr Sinha said.
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