Prime Minister Manmohan Singh has hammered out a compromise between Union Finance Minister Palaniappan Chidambaram and Union Agriculture Minister Sharad Pawar on the proposed zero duty import of wheat by private players.
At an hour-long meeting presided by Prime Minister Manmohan Singh at his official residence, both Pawar and Chidambaram presented their case.
Later, Sharad Pawar said, “There is no question of differences (with finance minister P Chidambaram). We have decided to allow zero duty import of wheat by private players till December 31 this year. The notification will be issued in a day or two, after I issue a communication on the issue.”
A minister in the Manmohan Singh Cabinet said, “The decision to allow zero duty import of wheat by private parties was taken at a meeting of Cabinet Committee on Prices ten days ago.” Pawar said, “The zero duty facility will cease to exist beginning January 1, 2007.” Though Pawar announced on Monday that zero duty import of wheat by private players will be allowed, the Central Board of Excise and Customs (CBEC) has not issued a notification to this effect.
This led to widespread confusion at the highest level on duty applicable to wheat imported by private players.
Earlier in the day, CBEC chairman VP Singh said, “Duty on wheat imports by private players was reduced from 50 to 5 per cent and the position stands”. A finance ministry official said, “We are not very keen on zero duty imports as it entails a revenue loss of Rs 90 crore.”
Before meeting the Prime Minister, finance minister P Chidambaram said, “There was no proposal, but there is a request from the agriculture ministry and we will have to consider it.” The agriculture ministry has projected ten lakh tonnes of wheat to be imported by private players at zero duty to augment supplies and reinforce buffer stocks. The state-owned State Trading Corporation (STC) received eight bids from international suppliers for 16.7 lakh tonne wheat imports. “All are valid bids,” an STC official said.
Prices quoted by suppliers abroad range from US $ 228 - $261 per tonne on cost and freight basis. The bidders in the race include AWB, Agrico, Concordia, Glencore, Toepfer, Adani Global, Cargill and Louis Dereyses.
Wheat imports were necessitated as the government could procure only 92 lakh tonnes against the targeted 162 lakh tonnes.