Home >News >India >Centre steps in to curb skyrocketing food prices
Trade and consumer affairs minister Piyush Goyal said import duty on potatoes have been reduced from 30% to 10% (MINT_PRINT)
Trade and consumer affairs minister Piyush Goyal said import duty on potatoes have been reduced from 30% to 10% (MINT_PRINT)

Centre steps in to curb skyrocketing food prices

  • To curb rising prices of onions, government banned its exports on 14 September and has eased imports norms of onions starting 21 October
  • India’s retail inflation accelerated to a four month high at 7.34% in September

Government on Friday decided to import 1 million tonnes of potatoes by 31 January next year and announced measures to curb rising prices of pulses to tame the galloping retail inflation.

Trade and consumer affairs minister Piyush Goyal said import duty on potatoes have been reduced from 30% to 10% for the fresh imports including 30,000 tonnes from Bhutan for which importers do not require license. Retail price of potato has been running above 40 per kilogram across most states in India.

For pulses, Goyal said the time limit for import of tur under import quota of 4 lakh tonne for FY21 has been extended till 31 December while import of urad under the already issued import quota of 1.5 lakh tonne expedited. Government is also supplying moong, tur and urad to states from the buffer stock making a retail intervention to reduce prices. Goyal said in next 15 days, 2 lakh tonnes of tur from the buffer will be disposed through open market sale. The government has also decided to extend the memorandum of understanding (MoU) with Mozambique for import of 2 lakh tonne of tur for another five years and is in the process of signing an MoU with Myanmar for five years to import 2.5 lakh tonne of urad.

To curb rising prices of onions, government banned its exports on 14 September and has eased imports norms of onions starting 21 October. However, it subsequently partially lifted the blanket ban on exports allowing shipments of export of Bangalore rose onions and Krishnapuram onions upto 10,000 metric tonne. Goyal said while 7,000 tonnes of onions have already arrived, another 25,000 tonnes will arrive before Diwali. Government has also invoked Essential Commodities Act setting onion stock limits at 25 tonnes for wholesalers and 2 tonnes for retailers starting 23 October.

Though retail inflation has remained stubbornly high well above the central bank’s comfort level, the Reserve Bank of India has retained an accommodative stance calling it a transient worry. “One year ahead inflation expectations of households suggest some softening in inflation from three months ahead levels. Selling prices of firms remain muted, reflecting the weak demand conditions," RBI said in its latest monetary policy review.

India’s retail inflation accelerated to a four month high at 7.34% in September, remaining well above the central bank’s targeted range for the sixth consecutive month, as food prices rose. RBI has projected retail inflation at 5.4-4.5% for the second half of FY21.

The central bank expects pressures on prices of key vegetables like tomatoes, onions and potatoes to ebb by December quarter with kharif arrivals. “On the other hand, prices of pulses and oilseeds are likely to remain firm due to elevated import duties," it added.

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