In order to boost domestic output of vegetable oil, the Economic Survey today suggested that import duty on cooking oils should be calibrated to protect the interest of farmers, consumers and processors.

The recommendation comes in the backdrop of the government raising import duty on crude edible oil to 2.5 per cent from zero, while ‘defreezing’ the tariff value of all edible oils.

India is one of the largest producers of oilseeds in the world. However, 50 per cent of its domestic requirements are met through imports, which touched a record over 10 million tonnes last year.

“Considering this situation, it is time to frame a price band for edible oils in a manner that harmonises interests of domestic farmers, processors, and consumers through imposition of import duty at an appropriate rate,” the Survey said.

One instrument for promoting future domestic production is “calibration of the import duty structure.”

The import duty would also generate revenue, which could also be utilised for an oilseeds development programme.

The oilseeds production, though it has increased in recent years from 184.40 lakh tonnes in 2000—01 to 297.99 lakh tonnes in 2011—12, has not kept pace with the demand for edible oils in India.

Imports have helped raise the per capita availability of edible oils from 5.8 kg in 1992—93 to 14.5 kg in 2010—11.

(This article was published on February 27, 2013)
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