The government is considering banning futures trading in chana dal (brown chickpeas) and reducing import duty on sugar as part of its efforts to rein in inflation, according to a top official.
Higher food prices, led by pulses and sugar, pushed wholesale price inflation into positive territory in April after 17 months of decline while consumer price inflation crossed 5 per cent in the same month.
The ban in futures trading in chana dal would be discussed at a committee of secretaries’ meeting on Monday but a final call would be taken by the finance ministry, the food ministry official said.
“ Urad and tur are not part of the futures trading market while chana dal is and its prices have been rising. We will take a decision on putting curbs in futures trading after inter-ministerial consultations.
The finance ministry would have to decide on this,” the official said.
VAT exemptionSeparately, to curb the surging prices of pulses, Union Consumer Affairs, Food and Public distribution Minister Ram Vilas Paswan requested state governments to exempt them from VAT (value added tax) and other local levies as it could help bring down prices by five to seven per cent. States have also been asked to rationalise stock limits for millers, producers and importers based on a logical formula linked to the consumption pattern.
“Prices of food items like pulses, sugar, edible oil seeds shoot up abnormally due to hoarding, profiteering and carteling by traders and middlemen – without any benefit to the farmers.
Traders hoard the stock of a commodity in a bordering state where stock limits are not imposed,” the minister pointed out, urging all states to impose stock limits in such commodities.
Sugar pricesMr.Paswan warned sugar producers and hoarders of a crackdown if prices don’t correct soon and reminded them that the government had helped the sugar industry when it was in distress and now that the sector is profitable, prices need not be as high as the Rs.49 per kg prevailing now.
“According to our needs, there is enough sugar but attempts to initiate hoarding have begun and sugar prices are being pushed up. We will think about reducing the import duty on sugar if this trend continues. The sugar price shouldn’t be higher than around Rs.33 per kg,” Mr. Paswan said after a meeting with state food ministers.
State watchThe minister has written to the chief ministers of Maharashtra, Tamil Nadu, Uttar Pradesh and Karnataka, asking them to keep a close watch on sugar mills’ stock position to ensure availability in the domestic market.
Responding positively to states’ suggestion that the Centre must also monitor the stock position of pulses’ importers, Mr.Paswan said, “We don’t want to bring in an inspector raj for this but the government must know the actual position.”
