Finance minister P Chidambaram, looking distinctly weary after a marathon meeting of the Union Cabinet convened to tackle 6.68% inflation.
Govt eases edible oil imports, bans rice, pulses export
Chidambaram warns steelmakers against hiking prices
MUMBAI: Finance minister P Chidambaram, looking distinctly weary after a marathon meeting of the Union Cabinet convened to tackle 6.68% inflation, announced a slew of measures half-an-hour before midnight on Monday, in an attempt to rein in commodity prices that are threatening to upend the common man's life.
This follows the Reserve Bank of India governor's statement on Monday evening that he was ready to tackle "unacceptably high" inflation, underscoring the seriousness across government quarters on tackling the issue.
Analysts said Reddy's statement could mean a tightening of cash conditions such as making loans costlier.
The measures announced by Chidambaram include a total ban on non-basmati rice exports, a reduction in import duty on edible oils, allowing states to impose stock limits with traders, and also warning the steel lobby to hold the priceline, no matter the consequences.
The decisions, listed below, are effective from 0000 hours Tuesday.
Ban on non-basmati rice exports:
The Centre announced an immediate ban on exports of non-basmati rice. In respect of basmati, the minimum export price has been decreased to $1,200 per metric tonne.
Cheaper imports of edible oil:
All edible oils in the crude form can be imported at zero duty, while the refined version can be imported by paying a customs duty of 7.5%.
"This will apply to, among other oils, palm oil, sunflower oil, soybean oil, coconut oil, and groundnut oil," Chidambaram said.
Vegetable oils imports at 7.5%:
Hydrogenated vegetable fats and oils will also be allowed to be imported at 7.5% customs duty.
"Wherever tariff values are being fixed or have been fixed --- such as for palm oil and soya oil, those tariff values will continue till further revision is announced," the finance minister said.
Export of pulses banned:
The government has banned export of pulses for one more year.
Butter, ghee imports cheaper:
Customs duty on butter and ghee will be reduced from 40% to 30%.
Maize imports freed:
The government has cut customs duty on maize from 15% to 0% under TRQ, or the tariff rate quota of 5 lakh tonnes. This means imports up to 5 lakh mt will be free of duty.
States to impose stock limits
In order to enable stock limits by state governments, the order of removal of licensing restrictions that applies to edible oilseeds and rice will kept in abeyance for a year. This means states can impose stock limits on traders. However inter-state movement and imports will be excluded. "Stock limit orders can be imposed on all commodities under the Essential Commodity Act," Chidambaram said.
Export of coconut, castor oils allowed, sesame banned:
Export of castor oil, coconut oil and all oils produced out of minor forest produce except sesame oil will be allowed. Coconut oil allowed only from Kochi port, export quantity monitored. The permission to export will be available until further orders.
Decision on steel deferred, firms warned:
The government has decided to defer the decision till minister of steel returns from abroad. "Some reports say steel producers are planning to raise prices. I would tell them to exercise extreme restraint," Chidambaram warned.
"We are trying to bring the iron ore and steel producers together tomorrow or the day after to thrash out matters," he said.
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