Minister Manmohan Singh on Friday asked States to consider waiving mandi taxes, octroi and local taxes for taming inflation, which affected the poor “harder” and posed a serious threat to the country's growth momentum.
He said much of the responsibility for checking price rise lay with the States.
“Much of what needs to be done... lies in the domain of State governments... There seems to be a strong case for waiving mandi taxes, octroi and local taxes, which impede the smooth movement of essential commodities,” Dr. Singh said addressing Chief Secretaries of States here.
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Stressing the need for a paradigm shift in institutional arrangements, he pressed the States for reviewing functioning of the Agricultural Produce Market Committee Acts (APMCAs) on “an urgent basis.”
Underscoring the role of super stores, the Prime Minister said storage facilities had to be augmented and “supply chains need to be dovetailed with the organised retails for quicker and more efficient distribution of farm products.”
Driven by the high prices of fruits, milk, meat and eggs, India's food inflation crossed 17 per cent for the week ended January 22.
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While the Indian economy is projected to grow by 8.8-9.0 per cent this fiscal, inflationary concerns were looming over the growth prospects.
However, Dr. Singh partly attributed the rise in prices of “superior food products” to rising income level and “corollary of faster growth.”
Dr. Singh said a lasting solution to inflation lay in increasing agricultural productivity and production not only of cereals but also of pulses, oilseeds, vegetables and fruits and augmenting the supply of milk and milk products, poultry, meat and fish.
He said that while the Centre would provide support for checking inflation, “each State has to work out a suitable plan of action suited to its requirements and its capabilities.” Though various social sector programmes for the empowerment of the poor and the disadvantaged met with reasonable success, “there is a perception that the schemes do not provide the intended benefits to them in full measure on account of leakages and at times tardy implementation.”