Lok Sabha Question No. 2336 (UNSTARRED), answered on 2022-03-16
Subject: Increase in Retail Inflation
Ministry: CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION
Asked by: Ranjanben Dhananjay Bhatt

## Government of India

## Ministry of Consumer Affairs, Food and Public Distribution Department of Consumer Affairs

## LOK SABHA UNSTARRED QUESTION NO. 2336

TO BE ANSWERED ON 16.03.2022

## INCREASE IN RETAIL INFLATION

2336. SHRIMATI RANJANBEN DHANANJAY BHATT: (OIH)

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 retail inflation has increased in the country due to increase in prices of food items;
- (b)    if so, whether the Government is contemplating to take any steps to decrease retail inflation rate; and
- (c)    if so, the extent and the time by which it is likely to be done and if not, the reasons therefor?

## 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)         : There is a strong correlation between retail inflation measured by year-on-year changes in Consumer  Price  Index  (CPI)  and  food  price  inflation  measured  by  the  year-on-year  variations  in Consumer Food Price Index (CFPI) as CFPI carries a weightage of 47.25% in the CPI. As per the CPI data released by the Ministry of Programme Implementation, retail inflation has remained more or less stable during the past one year.
- (b) & (c) : The Department of Consumer Affairs monitors the daily retail and wholesale prices of 22 essential food commodities submitted by the 179 price monitoring centres that have been set up with Central assistance by State Governments and UT Administrations across the country.

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.  Released  were  also  made  in  source  markets  to  augment  the availability in these key mandis and thereby reduce retail prices. States/UTs had also been offered onion at Rs.21/kg ex-storage 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 31.3.2022 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.

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