In an effort to insulate the common man from the inflation spiral, finance minister Arun Jaitley on Tuesday said farmers will now be allowed to supply fruits and vegetables directly in the open market against the current practice of selling them through Agriculture Produce Marketing Committees (APMCs).
The government also announced a slew of other measures to control prices, fearing a weak monsoon would hit crop output.
A top-level meeting called by Jaitley also decided to review milk product prices and withhold export incentives and to release more rice from the Food Corporation of India (FCI) into the public distribution system.
The government also imposed a minimum export price (MEP) on the export of onions. This will ensure availability of onion in the domestic market. The Centre will also ask states to procure additional supplies of onions for distribution through government's retail outlets.
Meanwhile, onion and other agriculture produce will resume auction at the APMC in Nashik district after a wage dispute settlement.
Onion prices, which have been hovering around Rs 15-16/kg a fornight ago in Mumbai, came down to Rs 8-10 on Tuesday following the settlement.