Lok Sabha Question No. 1434 (UNSTARRED), answered on 2024-07-31
Subject: Food Inflation
Ministry: CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION
Asked by: Shri Satpal Brahamchari

## Government of India

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

## LOK SABHA UNSTARRED QUESTION NO. 1434 (OIH) TO BE ANSWERED ON 31.07. 2024

## FOOD INFLATION

## 1434.   SHRI SATPAL BRAHAMCHARI:

(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 the Government is aware that the retail and food inflation has become very high in the country;
- (b) if so, the details thereof;
- (c) the  details  of  the  measures  taken  by  the  Government  to  check  the  excessive  increase  in  food  prices during the past years;
- (d) whether the Government has allocated adequate funds from the Price Stabilization Fund (PSF) to help reduce  volatility  in  prices  of  essential  agri-horticultural  commodities  like  pulses,  onion,  fruits, vegetables and potatoes;
- (e) if so, the details thereof; and
- (f) the details of the amount allocated from PSF during the last three years, year-wise?

## ANSWER

## miHkksDrk ekeys] [kk| vkSj lkoZtfud forj.k jkT; ea=h (श्री बी.एल. वर्मा )

## THE MINISTER OF STATE

## CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION (SHRI B.L. VERMA)

(a) to (f)  :  Department of Consumer Affairs monitors the daily retail and wholesale prices of 22 essential food commodities, submitted by the 550 price monitoring centres that have been set up with Central assistance by the State Governments and UT Administrations across the country. The daily report of prices and indicative price trends are duly analysed for taking appropriate decisions such as release of stocks from the buffer, stock disclosure  by  stockholding  entities,  imposition  of  stock  limits,  changes  in  trade  policy  instruments  like rationalisation of import duty, changes in import quota, restrictions on exports of the commodity etc.

Prices  of  food  commodities  tend  to  be  volatile  as  they  are  affected  by  several  factors,  such  as seasonality in production, adverse weather conditions, supply chain disruptions, artificial shortages created by hoarding and black marketing, rise in international prices etc. Sometimes slight disruptions in the supply chain or  crop  damage  due  to  adverse  weather  condition  etc.  lead  to  spike  in  the  prices  of  agri-horticultural commodities. Conversely, bulk arrival and logistics problems have the potential of creating a situation of glut in the market and resultant dip in prices.

In  order  to  protect  consumers  from  excessive  price  volatility  in  agri-horticultural  commodities,  the Government introduced  the Price Stabilisation  Fund  (PSF)  scheme  in  2014-15.  Under  PSF,  buffer  stock  of major pulses and onion have been maintained for market interventions and also to discourage hoarding and unscrupulous speculation. Stocks from the buffer are released in calibrated manner to augment availability in the market and stabilise prices.

To make the dals available to consumers at affordable prices, Bharat Dal was launched in July, 2023 by converting  Chana  stock  with  the  Government  into  Chana  Dal  for  retail  disposal.  The  Bharat  Dal  is  made available to the consumers at subsidized rates of Rs.60 per kg for 1 kg pack and Rs.55 per kg for 30 kg pack. Similarly, moong Dal and moong sabut are being sold at subsidized prices of Rs.107 per kg and Rs.93 per kg respectively, to the consumers, under the Bharat Dal Brand. The Bharat Dals are distributed through NCCF, NAFED, Kendriya Bhandar and state government controlled cooperatives.

In  order  to  augment  domestic  availability,  import  of  Tur  and  Urad  under  'Free'  regime  has  been allowed till 31st March 2025 and the import duty on Masur has been reduced to zero till 31 st March, 2025. Import of Yellow peas has been allowed from 8 th December, 2023 till 31 st October 2024 to augment supply of pulses. Further, the import of desi Chana at zero duty has been allowed from 4 th May, 2024 till 31 st   March 2025.

To prevent hoarding, stock limits have been imposed on Tur and desi Chana from 21 st June 2024 till 30 th September 2024.

Price control measures taken by Government together with robust progress in sown area under Kharif pulses this year (2024-25) have stabilised the market and the prices of Chana, Tur and Urad in major mandis had declined by up to 5% in past one month.

The  Government  maintains  onion  buffer  under  the  PSF  for  calibrated  release  during  the  lean availability months and check the volatility in prices. The buffer size has been increased year after year from 1.00  LMT in 2020-21 to 2.50  LMT in 2022-23 and further to 5.00  LMT in 2024-25. The onions from the buffer are released through retail sales, e-Nam auction and bulk sales in wholesale markets.

Further, to  control the  rise in  prices  of onion,  in  August,  2023,  export duty of 40% was imposed to enhanced domestic availability.  When export surged against increasing international prices, MEP of USD 800 per MT was imposed in October, 2023 and then prohibition of onion export from December, 2023. Thereafter, export had been allowed from 4 th  May, 2024 with 40% duty and MEP of USD 550 USD to ensure domestic availability of onion and keep prices under control.

Adequate fund has been allocated under the Price Stabilisation Fund (PSF). Since its inception in 201415 till 2023-24, a total of Rs.27,489.14 crore has been provided as budgetary support for the scheme. In Union Budget, 2024-25 has further allocated of Rs.10,000 crore under Price Stabilisation Fund. The annual budgetary support provided for PSF are transferred to the PSF Corpus Fund and price stabilisation operations involving procurement, storage and disposal of stocks are funded by drawing out of the Corpus Fund. Sale proceeds of stocks are ploughed back into the Corpus Fund. The year-wise amount of fund released from the PSF Corpus for interventions to reduce volatility in prices during last three years are given below:

## Year-wise release of Funds from the PSF Corpus

| Year    | Amount (Rs. in crore)   |
|---------|-------------------------|
| 2021-22 | 10,367.70               |
| 2022-23 | 4,582.82                |
| 2023-24 | 11,331.15               |