Government concerned about retail market owing to the entry of FMCGs: Sridhar Babu

Civil Supplies Minister D. Sridhar Babu has said that the State government has employed the services of a few professors of an Indian Institute of Management (IIM) to study the regulation of retail network in view of the threat of flooding of fast moving consumer goods (FMCGs) at multi-brand malls.

The government is concerned about the retail market owing to the entry of FMCGs and hence ordered the study which may take about two months, Mr. Sridhar told a meeting here on Sunday to mark the inauguration of AP State Dall Millers and Traders Federation.

About the decision to hike value added tax (VAT) on food items from 4 to 5 per cent, he said it was taken to maintain uniformity in taxation on all consumer products. The government was willing to order another study to consider withdrawal of the tax so as to maintain level playing field with other States which did not impose VAT on food items.

The technical evaluation to increase the variation margin in the weight of pulses at dall mills from the present 2 per cent to 6 per cent would also be studied, he added.

Variation in weight

Earlier, the leaders of the federation brought to the notice of the Minister that the mills were raided by vigilance authorities and booked for variance in weight in excess of 2 per cent. They said the weight of stock on ground varied from records because of drying of pulses since the time of purchase in a wet condition.

The federation president Namburi Madhu said the industry was unable to withstand harassment by vigilance officials as they had taken the extreme step of sealing the mills. The investment by owners was blocked till the courts delivered judgments. Vice-president Rajender Kimti said the millers were dubbed as hoarders and black marketers though they earned a profit of Rs. 25 to 50 a quintal.

President of State Rice Millers Association T. Devender Reddy pleaded that the raids be checked to ensure smooth running of the business.

Managing Director of AP Civil Supplies Corporation A. Dinakar Babu said the import of 1.53 lakh tonnes of red gram in 2009 solved a major crisis in its supply.