Govt’s schemes to hold prices come to nought | india | Hindustan Times
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Govt’s schemes to hold prices come to nought

india Updated: Mar 05, 2010 00:36 IST
Varghese George and Zia Haq

India’s efforts to curb inflation by shoring up supplies have not had the desired result because states could not lift enough subsidized foodstuff made available to them by the Centre — be it pulses or grains.

The Centre, in November last year, offered 4 lakh tonnes of imported pulses with a subsidy of Rs 10 per kg to states. Only nine states responded, lifting just 1.4 lakh tonnes so far. The scheme ends on March 31.

So too, between October 2009 and March 2010, of 10 lakh tonnes of rice allotted to states under the open market sale scheme, only 4.3 per cent was lifted. Of 20 lakh tonnes of wheat, 1.6 per cent was taken.

The Centre delivers grains and sugar to the states through the Food Corporation of India’s network. However, under the subsidised pulses scheme, the states had to lift pulses from four ports where they landed from Myanmar and Australia.

Many states found the schemes of no use and economically unviable, as the prices of grains and pulses under such schemes would have been more than prevailing market prices.

Assam and Bihar — states that did not lift pulses — found that lifting it from the Kolkata port, getting it processed and distributing it would have meant prices higher than in the open market. “In Assam, yellow peas is selling at Rs 27 but would have cost upwards of Rs 40 under the Centre’s scheme,” said Allaudin, who headed Assam’s civil supplies department until last month.

West Bengal, Tamil Nadu, Kerala, Andhra Pradesh, Maharashtra, UP, Haryana, Rajasthan and Himachal Pradesh found the scheme viable, though.

India’s annual food inflation continues to remain above 17 per cent, rising the highest in 11 years to 19.95 per cent on December 5 last year, mainly on account of high vegetable, pulses and sugar prices.

The Centre’s offer of grains at minimum support price for wheat and rice was also not attractive. Bihar chief minister Nitish Kumar argued that wheat and rice were available cheaper than the Centre’s price.