The central government may offload large quantities of rice and wheat from its warehouses to counter a possible price rise in the face of an impending drought.
The Empowered Group of Ministers (EGoM) headed by Finance Minister Pranab Mukerjee, which will meet on Monday, is expected to allow Food Corporation of India to sell wheat and rice in the open market.
It is also expected to approve the allocation of additional food grains to the states and Union Territories and the sale of food grains to bulk consumers through open tenders.
According to officials, the government plans to sell 10 million tonnes of wheat and 6.5 million tonnes of rice in the open market. This is enough to feed all of India’s 240 million households for 10 weeks.
“A similar move in 1987 (India’s worst drought) had prevented any hunger related death in India,” said Devinder Sharma, who heads Delhi based think tank Forum for Bio- Technology and Food Security.
Prime Minister Manmohan Singh will take up the issue with state chief ministers, who will be in Delhi next week to discuss internal security and drought-related issues, before the EGoM meeting on Monday afternoon.
Even after this, the government will still have enough in its buffer stock. According to ministry officials, the buffer and strategy stock for wheat would be 17 million tonnes and for rice it would be 13 million tonnes.
As on 1 August 2009, India had combined rice and wheat stock of 52.5 million tones, about 30 per cent higher than the stock on that day last year because of good procurement in April-May this year.