The government is considering abolishing the import duty on rice for 12 months to facilitate domestic availability of the staple and keep prices in check.
The finance ministry is considering a proposal by the department of food and public distribution to this effect and a decision is likely to be taken soon, government officials familiar with the development said on condition of anonymity. Rice now attracts a 70% import duty.
The duty cut is among a slew of measures in the process of being implemented in order to increase domestic availability of wheat, rice, sugar and edible oils after delayed and deficient rains affected much of the country’s crops.
As many as 209 districts have been declared drought-hit and the number is likely to rise in the coming days. In effect, as much as 50% of the country has been affected by a monsoon that has been 29% deficient this year.
The government is considering special allocations of wheat and rice to states affected by the drought. As much as 2 million tonnes (mt) of wheat and 1.2 mt of rice are proposed to be allocated to states between September and March.
Agriculture minister Sharad Pawar said on Tuesday that rice and sugar cane are bearing the brunt of scanty rainfall.
These measures will be accompanied by open market sales of at least 3 mt of wheat. Open market sales of around 1 mt of rice will take place in case of an abnormal increase in prices. This apart, an existing export ban on wheat and non-basmati rice will continue indefinitely. In addition, given the government’s own assessment of a further increase in sugar prices, the country is likely to import up to 7.3 mt of white sugar.