Govt to subsidise imported edible oil

According to the sources import of edible oil would be canalised through four state-owned agencies, the MMTC, STC, Nafed and PEC, reports Arun Kumar.

From price controls and outright bans to distribution, the government is sparing no policy measure to tame prices in an election year. Its latest price control proposal: distribute imported edible oil at highly subsidised prices through state government agencies.

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Sources in the government confirmed that import of edible oil would be canalised through four state-owned agencies — the MMTC, STC, Nafed and the PEC. “These agencies have been asked to import 1,00,000 tonnes of edible oil per month for 2008-09 which would be distributed through government channels at subsidised rates in retail packs,” a senior government official said.

The subsidy would be Rs 15 per kg. States have been requested to indicate their demands for edible oils. “Some of them have responded and the rest have been reminded. A scheme has been framed and the finance ministry is examining it,” the official said. Since India is expected to import around 50 lakh tonnes of edible oil, the subsidy amount would be over Rs 7500 crore.

The government completely banned export of non-basmati rice and raised the minimum export price of basmati rice to $1,200 per tonne.

Sources said the subsidised distribution was necessary as the landed price of imported edible oil, even after the duty reduction, is much higher than the domestic price.