Worried over the frequent "unacceptable" rise in food prices, the
government Thursday unveiled a slew of anti-inflation steps,
including regulating exports and imports, sale of onions through
government agencies, utilising state-run companies to source
pulses and stringent action against hoarders.
"Prices of most manufactured goods and services have been
reasonably stable, food prices have frequently risen at
unacceptable rates," the Prime Minister's Office (PMO) said in a
"The current bout of inflation is driven by a rise in prices of
vegetables and fruits which is more difficult to manage because
these commodities are not held in public stocks," it added.
The government has been on the backfoot after opposition parties
raked up the issue of price rise in rallies across the country.
India's food inflation has soared to over 18 percent, led by
onions which are selling in most parts of the country at Rs.55-60
Among some of the measures that the PMO suggested Thursday are
sale of onions at Rs.35 per kg by state-run National Agricultural
Cooperative Marketing Federation (NAFED) and the apex federation
of consumer cooperatives, NCCF, through their retail outlets.
"The arrival of onions from Pakistan will also help cool prices.
Import of 1,000 tonnes of onions has already been contracted.
Export of onions stands banned," said the PMO.
The government will also review import and export of all essential
commodities to ensure supplies in the domestic market.
It also warned of severe action against black marketers and
hoarders of food items.
"Cartelisation by large traders will be strictly dealt with.
Government will take stringent action against hoarders and black
marketers manipulating market prices," said the statement.
Though food inflation, has came down to 16.91 percent for the week
ended Jan 1 according to official figures released Thursday from
18.32 percent in the previous week, prices of vegetable still
continued to soar.
The measures were announced after three-hectic days of
consultations among senior ministers of the government, which was
initiated by the prime minister himself Tuesday.
He had entrusted his senior-most colleague in the cabinet, Finance
Minister Pranab Mukherjee, to suggest a way out of spiralling
Citing reasons for rising prices of food items like meat, eggs and
fish, the goverment said it was a result of,"fast growth of the
economy, leading to rising income levels, combined with the effect
of several inclusiveness programme which put greater income in the
hands of the relatively poor."
"The only lasting solution to food price inflation lies in
increasing agricultural productivity," the statement added. It
also said there was a need for facilities like cold storages to
improve the supply chain of perishables like milk and meat and
that this would help bring down prices of such items.
Some of the other actions laid out by the PMO are:
* State units to intensify purchases of essential commodities,
particularly edible oils and pulses, for distribution through
their retail network
* Existing schemes for subsidized distribution of edible oils and
pulses to be continued
* Exports of edible oils and pulses, as well as non-basmati rice
to remain banned
* A Committee of Secretaries under the Cabinet Secretary to review
the price situation with individual states
* An inter-ministerial group to be set up under the chief economic
adviser to review the overall inflation situation
* A scheme to support the state governments in the setting up of
farmers' mandis and mobile bazaars and to improve the functioning
of civil supplies corporations and cooperatives
* State governments to be urged to consider waiving mandi tax,
octroi and other local levies to bring down prices further
* Awareness campaigns to make people aware of cheaper alternatives
to pulses like yellow peas dak to influence consumption patterns
in favour of such alternatives
* Involve Residents' Welfare Associations and self-help groups in
distribution of essential commodities to address local shortages
and ensure that supplies reach the households with least
* Investments to be encouraged in supply chains including
provisions for cold storages
* Storage capacities to be increased to stock last years bumper