Press Trust of India, NDTV Profit

The government has said high food inflation is adversely affecting the common man and it intends to employ various measures to tackle the situation, including schemes that will facilitate opening up farmers’ mandis and mobile bazaars.

Some of the important steps the government intends to implement include schemes enabling state governments to set up farmer’s mandis and mobile bazaars, strengthening of the Public Distribution System (PDS) through computerisation and opening more procurement windows across the country, Minister of State for Finance Namo Narain Meena told the Rajya Sabha in a written reply.

The government also intends to review the Agriculture Produce Marketing Committee (APMC) Act to consider exempting horticulture products from its purview, thereby mitigating marketing and distribution bottlenecks, he said.

State governments would be urged to consider waiving mandi tax, octroi and other local levies, as well as reduce commission agent charges, while encouraging investment in supply chains, he added. In another written reply, he said, “High inflation affects the common man on account of reduction in the value of currency relative to goods and services.”

The government monitors the price situation regularly, as price stability remains high on its agenda, he said. Measures taken to contain prices of essential commodities include a selective ban on exports and futures trading in food grains, zero import duty on select food items and permitting the import of pulses and sugar by public sector undertakings, he said.

In addition, he said, state governments are empowered to act against hoarders of food items under the Essential Commodities Act, 1955. As part of the inflation control measures, various state governments issued almost 350 detention orders against hoarders in 2009 and 2010 under various regulations.

During 2009, 147 detention orders were issued against hoarders and traders in six states, while in 2010, it increased to 205, he said. In a separate reply, Meena said, year-on-year inflation in fruits and vegetables stood at 22.7 per cent in December, 2010, mainly on account of higher prices of onions.

The rise in prices of onions was partly due to cyclonic rains, which affected onion crops in Maharashtra and Karnataka, he said. Replying to another question, Meena said the tax-GDP ratio for 2009-10 stood at 9.6 per cent, compared to 10.8 per cent in the previous fiscal.

Going forward, in tandem with a pick-up in gross tax revenues, the tax-GDP ratio would improve with restoration of the trend rates of growth in GDP at Current Market Prices.