Waiver through, UPA Govt turns focus on price rise

After a farmer-friendly Budget, the UPA Government has now stepped up efforts to contain price rise of essential items.

After a farmer-friendly Budget, the UPA Government has now stepped up efforts to contain price rise of essential items. The Government has announced measures to check hoarding of wheat and export of rice, which could affect the supply of both these essential foodgrains in the election year. The move comes amid estimates that inflation has crossed the RBI-defined tolerant limit of 5 per cent for the first time in 10 months.

Less than a week after the Budget, the Government issued a circular raising the minimum export price (MEP) for non-Basmati rice from $500 a tonne to US $650 a tonne. The move is expected to ensure sufficient availability of rice in the country and contain prices from flaring up.

In fact, the Government has gone a step ahead and announced an MEP for Basmati, which was earlier exempted. The minimum price for exporting basmati rice will now be $900 per tonne.

Earlier, the Government had restricted wheat purchase by the private traders, making it mandatory for any trader, person or company to declare their stock on a monthly basis if they purchase above 10,000 tonnes this season. Last year, the Government had made it mandatory for private players to declare their wheat stocks if they cross 50,000 tonnes, but this year the limit has been further tightened.

The measures are significant, considering that Finance Minister P Chidambaram had in the Budget underlined the need to tackle food price inflation amidst the upward movement in global foodgrain prices. “The management of the supply side of food articles will be the most crucial task in the ensuing year,” Chidambaram had said, underlining inflationary pressure arising out of the increase in wheat and rice prices in the world market by 88 per cent and 15 per cent, respectively.

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• Minimum export price (MEP) for non-Basmati rice hiked from $500 to $650 a tonne

• MEP for Basmati rice fixed at $900 per tonne

• Traders purchasing above 10,000 tonnes of wheat will have to declare stock every month