Union Cabinet raises minimum export price by $200/tonne to boost domestic supply
Battling inflation and price rise, the Centre on Wednesday cracked the whip on hoarders and black-marketeers by putting onion and potato under the purview of the Essential Commodities Act (ESMA) and imposing stock holding limits in a bid to improve availability of these items.
The decision was taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA) headed by Prime Minister Narendra Modi and a notification to this effect will be issued on Thursday.
Stock holding limits, which will be determined by State Governments, will prohibit traders/individuals from storing onion and potato beyond the prescribed ceiling. The stock holding limits will be in operation for the next one year.
“The CCEA has decided to bring onion and potato under the purview of the stock holding limits under the Essential Commodities Act, 1955. With this, we are giving right to State Governments to take stern action against hoarding and black-marketing,” law Minister Ravi Shankar Prasad told the media here.
Onion and potato were brought under the Essential Commodities Act during the period between 1999 and 2004. Stating that there are complaints that prices are rising despite adequate supply in the country, Prasad said the CCEA discussed the emerging situation “seriously”.
In the absence of ESMA, black-marketeers and unscrupulous traders indulge in hoarding certain essential items and illegally control supplies in the market with an intention to jack up prices to the detriment of the consumers.
The ESMA is aimed at ensuring easy availability of essential food items and to protect consumers from exploitation by unscrupulous traders. The law provides for regulation and control of production, distribution and pricing of commodities under the law.
Prasad said six States, including Delhi, West Bengal and Chhattisgarh, had sought permission to impose stock holding limits. Earlier in the day, the Union Government hiked the minimum export price (MEP) on onions to $500 a tonne from $300 a tonne to boost domestic supply of the commodity and control prices that have risen in the last one month amid forecast of below normal monsoon. Exports of potatoes are also curbed by imposing an MEP of $450 a tonne.
In the national capital, retail prices of onion are in the range of Rs 25-30 per kg, up from Rs 15-20 a kg in May. The wholesale price at lasalgaon in Nashik is Rs 18.50 per kg, up by about 80 per cent from June 1 levels. Retail price of potato is Rs 27 per kg and wholesale price is Rs 16.75 per kg.
Onion production is estimated to have risen to 192 lakh tonnes during 2013-14 crop year (July-June) from 168 lakh tonnes in 2012-13.