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With the prices of essential food items shooting up, Finance Minister Arun Jaitley on Tuesday announced a series of measures, including free trading of fruits and vegetables and releasing rice in the open market, to tame inflation.
“Even though the increase has been marginal, we do not want anybody to exploit the situation… in anticipation of any further market reaction, a series of steps have been worked out,” Jaitley told reporters in New Delhi after an hour-long meeting with the Ministers for Agriculture, Food & Consumer Affairs, Commerce and Industry, and the Principal Secretary to the Prime Minister, among others.
The Centre has also advised States to crack down on hoarders. “There are 22 commodities under active observation of the Government and out of these we were concentrating on 4-5 commodities where some price fluctuation or increase has happened. Now, a series of steps have been decided anticipating any further price hike on account of various factors,” Jaitley said.
He added that States are being advised to delist fruits and vegetables from the APMC (Agriculture Produce Marketing Committee) Act. Farmers will have the option of directly going to the open market. “As regards Delhi, the Lt Governor will be advised to issue an order for delisting on Wednesday itself,” he said.
Minimum export price In order to curb a sudden onion price rise, the Government has reintroduced the Minimum Export Price (MEP) of $300 a tonne. Delhi has been the most affected as far as onion prices are concerned. The Centre has decided to advise the Delhi Government to purchase onions through the public system and release them in the market through Mother Dairy outlets, among others.
Similarly, the MEP for potatoes will also be fixed.
Buffer stock At the meeting, it was also agreed to release 5 million tonnes of rice in the open market from the Central stock pool. Against a buffer norm of about 10 million tonnes of rice in the Central pool, the stock, as of June 1, was slightly over 20 million tonnes. The meeting also decided to facilitate States in importing pulses and edible oils. “A line of credit will be extended to the states because they are in OGL (Open general Licence category) so that if any state notices a shortage, it should immediately import these items,” the Minister said.
RBI focus Meanwhile, RBI Governor Raghuram Rajan has said that the apex bank will continue to focus on containing rising prices and also keep a close eye on developments in Iraq. That would mean elevated interest rates for now.
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