Concerned over rising prices at a time when the threat of a drought looms large, finance minister Arun Jaitley on Tuesday asked state governments to crack down on hoarders and enable freer supply of fruits and vegetables by delisting them from the APMC Act.
“The government is actively monitoring prices of 22 commodities. There has been a rise in prices of four to five commodities… The rise in prices is marginal but we do not want any one to exploit the system,” said Jaitley, announcing a slew of measures to check price rise, prevent hoarding and improve supplies of food grain and commodities.
The measures were discussed at a specially convened meeting on Tuesday evening with agriculture minister Radha Mohan Singh and food and consumer affairs minister Ram Vilas Paswan, commerce and industry minister Nirmala Sitharaman and top officials including Nripendra Misra, Principal Secretary to the Prime Minister.
While the consumer affairs ministry will shortly issue notifications implementing all measures, Jaitley said that state governments will be urged to crack down on hoarders and remove restrictions on trading of fruits and vegetables.
The commerce ministry, which had earlier in the day imposed a minimum export price of $300 per tonne on onions to discourage their exports, will also fix a minimum export price for potatoes.
Jaitley said the government will also release additional quantities of rice in the market. To ensure sufficient supply of rice, 50 lakh tonne of the foodgrain will be offloaded in the market.
Meanwhile, announcing similar steps for edible oil and pulses, Jaitely said an additional line of credit will be opened, enabling states to direct import these items in case of a shortfall.
For Delhi, a notification for delisting fruits and vegetables from the APMC Act will be issued on Wednesday, said the finance minister.
“The Delhi government will also procure and purchase onions and potatoes through the public system, enabling their sale at Mother Dairy outlets,” he said.
The series of measures were announced a day after data revealed that headline inflation rose 6.01 per cent in May – its highest in the last five months and food inflation neared double digits at 9.5 per cent in the month.
The spurt was fuelled by more expensive vegetables such as potato that saw a 40.65 per cent rise in price, vegetables (17.99 per cent), fruits (8.26 per cent) and onions (7.10 per cent).
Inflation top priority, can weather external shocks: RBI Governor
Mumbai: Reserve Bank of India Governor Raghuram Rajan on Tuesday indicated that the central bank would tackle inflation in the next few quarters and assured markets that India was better prepared to deal with external shocks than last year in the wake of renewed violence in Iraq and its impact on oil prices.
“As far as the external front goes, we are in a much better position than we were last year,” Rajan said on the sidelines of a conference organised by the State Bank of India. “We have sufficient reserves, the current account deficit is low. So I think one shouldn’t worry too much about the external side at this point,” Rajan said.
Brent crude futures had risen by around $3 over the past week, following the developments in Iraq where militant groups have taken control of large tracts of the country’s north.
The Governor said that going forward, the RBI will have to tackle inflation for the next few quarters. “Last few months and, I expect, the next few quarters will be primarily engaged in combating inflation,” he said, indicating that interest rates are unlikely to come down in the near future.
“We are watching the inflation situation. Food prices have had an effect in the last couple of months and the hope is that with appropriate food management these prices will come down,” Rajan said.
On Iraq, Rajan said that since oil resources are in the south, the situation in the north has not directly affected the oil business.
“The issue in Iraq is still an area of uncertainty. It is an issue that we are watching, and of course all should be concerned with the fighting in Iraq,” he added.