Jaitley asks states to crack down on hoarders to check prices
The Centre on Tuesday unveiled measures to tame inflation by asking state governments to crack down on hoarders and delist items such as onions and potato on which a minimum export price was slapped to discourage exports.
New Delhi: With spiralling inflation, the Centre on Tuesday asked the states to crack down on hoarders while unveiling a series of measures to check prices of cereals, fruits and vegetables and slapping restrictions on potato and onion exports.
The host of measures to tame inflation, which had soared to a five-month high of 6.01 per cent in May, was taken at a high-level meeting of Ministers and Secretaries called by Finance Minister Arun Jaitley.
Among other measures, the Centre asked the states to delist fruits and vegetables from the Agricultural Produce Market Committee list, allowing farmers to sell their produce directly in the open market, and imposed a minimum export price of USD 300 per tonne on onions to curb their exports.
The Commerce Ministry has been asked to come out with a similar measure for potatoes.
The government has also decided to release an additional 50 lakh tonnes of rice to states for sale in the open market at APL (above poverty line) rate of Rs 8.30 per kg and allowed states to directly import pulses and edible oils to meet shortages.
The meeting to discuss steps to deal with the price rise was attended by Agriculture Minister Radha Mohan Singh, Food Minister Ramvilas Paswan, Commerce Minister Nirmala Sitharaman and top officials including Nripendra Misra, Principal Secretary to Prime Minister Narendra Modi.
"There are 22 commodities which are under active observation of the government," Jaitley said, adding that a rise in prices has been noticed in 4-5 commodities. "The steps include advising the states where we have seen tendency of hoarding, particularly in anticipation of weak monsoon, to crack down on hoarders.
"...Even though the increase has only been marginal, we don't want anybody to exploit the situation and therefore in anticipation of any further market reaction, a series of steps have been decided and they are being put in place," Jaitley told reporters after the meeting.
Jaitley further announced that states are being "advised to delist fruits and vegetables from the AMPC list which means a farmers will have an option of either going through APMC and the middlemen there or the option of going to the open market itself".
The Finance Minister said the Delhi Lt Governor will be advised that "tomorrow itself this delisting order with regard Delhi for all fruits and vegetables be issued".
The Delhi Government has also been advised to procure onion and off load through Mother Dairy retail outlets.
Jaitley also said a minimum export price (MEP) will be imposed on potatoes by the Commerce Department, while it has already been imposed on onion.
Among other steps, Jaitley announced additional quantity of rice will be released into the market.
"With regards to pulses and edible oils, a line of credit will be extended to states under OGL (open general licence), that is in any state if they notice shortage, they should immediately import these items," he said.
Later, Food and Consumer Affairs Minister Paswan told reporters that government would be giving an additional 50 lakh tonnes of rice to states for sale in the open market at Rs 8.3 per kg.
The minister also the Consumer Affairs department will "will write to state governments to implement these decisions at the earliest".
Rising prices of essential food items such as vegetables, fruits and cereals pushed up inflation to a five-month high of 6.01 per cent in May.
The likelihood of a sub-normal monsoon and the fallout of violence in Iraq on commodity and oil markets may further worsen the price situation.
Reserve Bank of India Governor Raghuram Rajan said the central bank will be focused on controlling inflation over the next few months.
Later in the evening, Ministry of Consumer Affairs, Food & Public Distribution in a statement said amid rising prices of milk, it was also decided to de-incentivise its exports.
"The meeting also reviewed the steady increase in the retail price of milk and took a decision to consider withholding export incentives currently in force," it said.
Referring to the MEP on onion, the Ministry said the restriction is "expected to have a salutary impact on the availability of onions in the domestic market".
Keeping in mind the increase in the retail price of rice, the statement said that it was also agreed in the meeting that government, through the Food Corporation of India, would release more supplies to state governments to be released through the Public Distribution System (PDS).
At the meeting, the Finance Minister called for urgent and timely attention be given to all matters related to price rise, and that the departments concerned should take necessary steps without any delay.
"The Finance Minister also emphasised on the urgency to effectively check constraints in ensuring smooth flow of essential commodities availability in the market through dehoarding, timely inspection, monitoring etc," the statement said.