IN AN attempt to cap and reverse the spiralling prices of essential commodities, the government on Thursday eased rules and allowed private players to import unlimited quantities of wheat and sugar without paying duties.
The decision was taken by the Cabinet Committee on Prices (CCP) chaired by Prime Minister Manmohan Singh. While banning the export of pulses, the government asked the National Agency for Export Development to import 45,000 tonnes of urad dal and other lentils.
After the CCP meeting, Finance Minister P. Chidambaram said wheat, pulses and sugar were driving the prices up. "We are confident that with these decisions, inflationary expectations will be dampened," he said.
While the duty-free import of sugar will be allowed till September 30, wheat can be brought in till March 2007. The decision comes in the wake of demands by Congress president Sonia Gandhi, the Left and the NDA to bring down the prices.
Though a decision is in place, there is a snag. Sugar prices have firmed up in the international market and the availability of wheat looks bleak. In London markets, sugar was quoted at $420 per tonne. Imported sugar may cost nothing less than Rs 30 per kg. Considering the current price in the retail market is Rs 22 per kg, sugar import may not be cost-effective.
Wheat import is a messy business after the government set aside quarantine laws and unwittingly allowed in 100 varieties of weeds.
Though it allowed the import of 35 lakh tonnes of wheat, only 91,000 tonnes have arrived till now. On the rising prices of vegetables, the Centre left it to the states to tackle supply constraints.