New Delhi, June 22
The UPA government today announced a slew of measures like ban on export of pulses, allowing private players to import wheat and limited import of sugar to arrest spiralling prices.
“Wheat, pulses and sugar are driving prices up, therefore, the decision has been taken to augment the supply side. We are confident, that with these decisions, inflationary expectations will be dampened,” said Union Finance Minister P. Chidambaram after a meeting of the Cabinet Committee on Prices.
He said the state governments were also being asked to take adequate steps against hoarding if it was taking place.
Interestingly, the prices have shown a steady upward trend despite the fact that the production is expected to be only marginally lower than last year. The failure has been the government’s inability to procure and maintain the buffer stock, at a time when the private traders made a killing by procuring from the farmers at a price marginally higher than the MSP, but much less than Rs 800 per quintal — the price at which the government would import.
The rising prices of wheat and other food items had assumed political dimensions with Congress President Sonia Gandhi joining the Left parties in expressing concern on the matter and asking the Manmohan Singh government to take remedial measures during the two-hour-long meeting last week.
The Communists had raised the issue during the UPA-Left Coordination Committee meeting where the government had assured the outside ally that it would not hesitate to allow imports to arrest the rise in prices.
Mr Chidambaram said the CCP held detailed discussions with the agriculture and other related ministries about the prevailing situation.
“A decision has been taken to import adequate quantity of wheat and some quantities have already been contracted,” he said adding the government had not compromised on quarantine norms.
He said a decision had been taken that the Codex norms would be adhered to while importing wheat.
Mr Chidambaram said besides the designated canalising agency for wheat import STC, the government had also decided to allow the private sector to import wheat. This was to provide for the flour mills requirements, he said, adding the details, including the level of duties, would be announced shortly.
As far as pulses was concerned, he said, the government had decided to hold up any further exports from the country. “The export of pulses will be halted with immediate effect,” he said.
He said the CCP had also decided to import sugar before September 30, which was the end of
the current season and before the start of next crushing season.
This would be under Tariff Rate Quota Principle (TRQ), he said adding the tariff rate and quantity would be decided later and announced shortly.
“A lot of time was spent on addressing the issue of prices. It was felt that these three primary articles (wheat, pulses and sugar) are showing a rising trend,” he said.
Mr Chidambaram said the inflation rate on the manufactured articles was low though fuel sector had shown an increase due to rise in fuel prices.
In reply to a query on regulating the commodities futures market, Mr Chidambaram said the Forward Contracts Regulation (Amendment) Bill was awaiting clearance and was currently before a Parliamentary Standing Committee.
He said, the government today directed the Cabinet Secretary to look into the regulation of the commodity market with assistance from experts. “I expect the Cabinet Secretary to come back to us in a few days time on this,” the finance minister
said.
