Lok Sabha Question No. 3246 (UNSTARRED), answered on 2022-03-23
Subject: Increase in Prices of Essential Commodities
Ministry: CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION
Asked by: M. K. Raghavan

## Government of India Ministry of Consumer Affairs, Food and Public Distribution

## Department of Consumer Affairs

## LOK SABHA UNSTARRED QUESTION NO. 3246

TO BE ANSWERED ON 23.03.2022

## INCREASE IN PRICES OF ESSENTIAL COMMODITIES

3246.  SHRI M.K. RAGHAVAN:

## Will the Minister of CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION miHkksDrk ekeys] [kk| vkSj lkoZtfud forj.k ea=h be pleased to state:

- (a) whether the Government has noticed that as a result of Russia Ukraine war, prices of essential and non essential commodities have skyrocketed across the world and if so, the details thereof;
- (b) whether the  Government has taken  any measures to ensure that prices  of  these  commodities  are stabilised in India and if so, the details thereof;
- (c) whether as a result of ongoing war, there is an increase in the logistic costs of items being imported into India and if so, the details thereof; and
- (d) whether  the  Government  has  taken  measures  to  ensure  that  global  sanctions  on  Russia  doesn't impact India in any way and if so, the details regarding the steps being taken to ensure the same?

## ANSWER

## miHkksDrk ekeys] [kk| vkSj lkoZtfud forj.k jkT; ea=h (श्री अश्विनी क ु मार चौबे)

## THE MINISTER OF STATE CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION (SHRI ASHWINI KUMAR CHOUBEY)

(a) to (d): The Department of Consumer Affairs Monitors the daily domestic wholesale and retail prices of 22  essential  food  commodities.    The  all  India  average  retail  prices  of  the  22  essential  food  items  have shown upward pressure since the outbreak of Russia - Ukraine conflict.

Taking  into  account  price  trends,  the  Government  takes  various  measures  from  time  to  time  to augment domestic availability and stabilize prices of essential food commodities. These steps, inter alia, include  releases  from  the  buffer  to  cool  down  prices,  imposition  of  stock  limits,  monitoring  of  stocks declared  by  entities  to  prevent  hoarding  as  also  requisite  changes  in  trade  policy  instruments  like rationalization of import duty, changes in import quota, restrictions on exports of the commodity etc.

In May, 2021 advisories were issued to States/UTs to monitor prices of essential food commodities and  to  ensure  disclosure  of  pulses  stocks  held  by  millers,  importers  and  traders  under  the  Essential Commodities  Act,  1955.  Imposition  of  stock  limit  on  all  pulses  except  Moong  was  notified  on  2.7.21. Thereafter, an amended order was issued on 19.7.21 imposing stock limits on four pulses, namely, Tur, Urad, Masur, Chana for a period up to 31.10.2021.

To improve availability and stabilise prices of pulses, the Government has allowed import of Tur, Urad and Moong under 'Free category' w.e.f 15.5.2021 till 31.10.2021. The Free regime was thereafter extended  in  respect  of  Tur  and  Urad  till  31.3.2022.  This  policy  measure  has  been  supported  with facilitation measures and close monitoring of its implementation by the concerned Departments/organisations  to  ensure  smooth  and  seamless  imports.  The  import  policy  measures  have resulted in substantial increase in import of Tur, Urad and Moong as compared to the corresponding period for the past two years. In order to soften the impact of higher international prices on domestic consumers, the  Government reduced duty on Masur to zero till September 30, 2022 and waived off the penalty  on pulses  import  consignments  from  methyl  bromide  phased  out  countries  for  not  being  fumigated  with methyl bromide in the country of origin till June 30, 2022. To augment the availability of pulses in the market, 3 Lakh Metric Ton of Chana stock has been released between June and August, 2021 through open market sales and to stabilise prices, futures trading in Chana has been suspended from August 16, 2021. State Governments have been supplied pulses from the buffer on an ongoing basis for their nutrition and welfare programmes.

In order to stabilise retail prices of onion, a buffer stock of 2.08 LMT had been built in 2021-22. Open  market  releases  of  onion  from  the  buffer  were  targeted  towards  States/Cities  where  prices  were increasing over the previous month. Releases were also made in source markets to augment the availability in  key  mandis  and  thereby  reduce  retail  prices.  States/UTs  had  also  been  offered  onion  at  Rs.21/kg  exstorage locations.

In  order  to  improve the  domestic availability of  edible oils and to keep  prices under control, the Government has rationalized the duty structure on edible oils by reducing the effective duties. As per the notification dated 14.10.2021, the total duty on crude palm oil has been reduced from 22.5% to 7.5%, and on crude soyabean oil and sunflower oil it has been reduced from 22.5% to 5%. The basic duty on RBD palmolein,  refined  soyabean  oil  and  refined  sunflower  oil  has  been  reduced  from  32.5%  to  17.5%. Thereafter,  the  basic  duty  on  refined  palm  oil  has  been  further  reduced  from  17.5%  to  12.5%  w.e.f 21.12.2021  and  duty  on  crude  palm  oil  reduced  from  7.5%  to  5%  w.e.f  13.2.2022.  Futures  trading  in essential  commodities  relating  to  food  security  had  been  suspended  to  curb  speculative  trading.  Stock limits on edible oils and oilseeds have been imposed for a period upto 30.06.2022 to prevent hoarding.

Further,  the  Government  has  issued  advisory  to  States/UTs  to  set  up  the  State-level  Price Stabilisation  Fund  (PSF) corpus with central assistance, and has requested States which have set up the Fund  already,  to  make  appropriate  interventions  for  cooling  down  retail  prices  of  essential  food commodities.

As per the Department of Economic Affairs's Monthly Economic Review of February 2022, the geopolitical tensions involving Russia and Ukraine triggered massive turbulence in the global economy. Within days, international prices of crude oil and other commodities shot up escalating the cost of India's import basket. Its impact on India's activity level in March, if any, can be assessed only a month later, when high frequency data becomes available.

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