Govt raises support price for wheat, allows exports3 min read . Updated: 26 Dec 2012, 09:37 PM IST
The price increase to `1,350 per quintal from `1,285 for wheat is more than the `40 hike suggested by the agri pricing panel
New Delhi: The government on Wednesday raised the minimum support price (MSP) of wheat under pressure from producers, a move that’s expected to see state warehouses filling up with more of the foodgrain.
At the same time, it also allowed the export of 2.5 million tonnes (mt) of wheat since it has an abundance of the cereal in its warehouses.
With the government under sustained attack over the past few days for its ham-handed response to public anger stemming from the seeming inaction over the gang-rape of a woman on 16 December, the cabinet also took several measures to address the issue of women’s safety. It also set up a commission of inquiry into the rape.
The increase in MSP for wheat to ₹ 1,350 per quintal from ₹ 1,285 was more generous than the ₹ 40 hike recommended by the Commission for Agricultural Costs and Prices (CACP). One quintal is 100 kg. The CACP suggestion was accompanied with the condition that 15 mt of wheat stocks be liquidated.
“It is good that the hike in MSP is higher, but only 2.5 mt of wheat export will not solve the problem," CACP chairman Ashok Gulati said.
He also said that at least 7-8 mt should be exported as the stocks are expected to be much higher.
The decisions, taken at a meeting of the Cabinet Committee of Economic Affairs, were announced by finance minister P. Chidambaram, who said wheat will be exported from the central pool stocks of the Food Corporation of India as the government has “three times the buffer stock available".
The exports are to be completed by June and the ultimate beneficiary of the move to export 2.5 mt will be the government as “it would ensure the efficient management of food stocks in central pool", the government said in a press release.
The MSP increase “will not be particularly inflationary", said Ajit Ranade, chief economist, Aditya Birla Group. The hike is in line with the average inflation expectations of around 7% next year, he said.
The government also approved the sale of a 12.5% stake in state-owned Rashtriya Chemicals and Fertilizers Ltd, in which it has a 92.5% shareholding.
Chidambaram said this will make the company compliant with the Securities and Exchange Board of India’s public shareholding norm of a minimum 10%.
The government also approved a proposal of the ministry of shipping for the licensing of land to the concessionaires of seven public private partnership projects to augment port capacity and improve efficiency.
The cabinet committee on political affairs decided to set up a one-person commission of inquiry under retired Delhi high court judge Usha Mehra to examine the 16 December rape, identify lapses and negligence by the police and other agencies, and fix responsibility for these.
The committee will submit a report in three months from its first meeting, which will be placed in Parliament with the government’s action-taken report.
The commission will also suggest measures to ensure safety and security of women, especially in the capital.
The government has already appointed a commission headed by retired Supreme Court chief justice J.S. Verma to review existing laws, suggest amendments and speed up trials. This commission will submit its report in 30 days, after which the government will look at amending the laws.
Meanwhile, a controversy broke out over what exactly led to the death of constable Subhash Tomar following the violent protests on Sunday.
The Delhi Police on Wednesday assigned the investigation into the death to the Crime Branch.
While eight people have been charged with murder, media reports say the cause of death was unclear.
Separately, the Delhi government decided to double the services of state-run buses during nights to 85 and deploy home guards in them as a security measure.
Traffic flowed smoothly through the centre of the national capital on Wednesday after restrictions had been imposed on the previous two days to prevent protesters from congregating in the India Gate area.
While the protests continued to wind down, prohibitory orders were kept in place. The ruling Congress party distanced itself from demands for the removal of Delhi police commissioner Neeraj Kumar on Wednesday.
PTI contributed to the story.