Centre Says Measures In Place To Check Price Rise

Relevance: GS2 - Government Policies and Interventions; GS3 - Public Distribution System- objectives, functioning, limitations, revamping; Issues of buffer stocks and food security

(Source: The Hindu, 20/10/2023)

Click here for Daily Current Affairs

Why in the news?

• Recently, the Union Food Secretary assured that prices of essential food items will remain stable, offering relief to the millions of consumers who tend to increase their purchases during the festive season.

Government Measures to Ensure Price Stability for Essential Food Items

• Export Restrictions on Rice: The Government, in order to check the domestic prices and to ensure domestic food security, has taken several pre-emptive measures to restrict export of rice from India.
  • India is the world's largest rice exporter, but in July there was ban on overseas shipments of non-basmati white rice and later imposed a 20% tax on parboiled rice cargoes to ensure sufficient supplies in the domestic market.
  • The government has extended the 20% export duty on parboiled rice until March 31, 2024, to ensure ample availability in the domestic market. This move has significantly reduced parboiled rice exports by 65% in quantity and 56% in value.
  • The export of broken rice has also been prohibited, and a 20% export duty has been imposed on non-basmati white rice.
• Wheat Availability: The government has initiated the Open Market Sale Scheme (domestic) through e-auction to release 50 lakh tonnes of wheat. The Food Corporation of India (FCI) has already sold 25.6 lakh tonnes under this scheme. These actions have increased the availability of wheat and helped stabilize its prices, with a retail inflation rate of approximately 3.6% over a year.
• Edible Oil Price Stability: The government stated that edible oil prices will remain stable during the festival season and expects no significant price hikes in the coming months.
• Sugar Export Restrictions: The government has extended restrictions on the export of various types of sugar, including raw, white, refined, and organic sugar, with no specified end date. New Delhi has also extended its restriction on sugar exports, as output is likely to drop due to patchy rains in top sugar cane producing states of Maharashtra and Karnataka.

Significance of Government's move to Ensure Price Stability

• Consumer Relief: These measures aim to prevent significant price increases for essential food items like rice, wheat, and sugar during the festival season.
• Food Security: By maintaining adequate availability of these food items in the domestic market, the government is contributing to food security. This ensures that people have access to these necessities without experiencing shortages or unaffordable prices.
• Inflation Control: These actions can help control inflation, particularly in essential food items. By restricting exports and increasing domestic supply, the government can mitigate price spikes, which can have broader implications for overall inflation rates.
• Economic Impact: Stable food prices can positively impact the purchasing power of consumers and contribute to economic stability. When essential food items are affordable, households have more disposable income to spend on other goods and services.

Conclusion

These efforts underscore the government's commitment to addressing economic and nutritional concerns, particularly during festival seasons, and serve as a crucial component of broader food security and economic stability initiatives.

(*Click this link to read prelims specific weekly current affairs articles)

FAQs

PYQs

Question: The economic cost of food grains to the Food Corporation of India is Minimum Support Price and bonus (if any) paid to the farmers plus: (UPSC 2019)

(a) Transportation cost only

(b) Interest cost only

(c) Procurement incidentals and distribution costs

(d) Procurement incidentals and charges for godowns

Question: With reference to foreign-owned e-commerce firms operating in India, which of the following statements is/are correct? (UPSC 2022)

1. They can sell their own goods in addition to offering their platforms as marketplaces.
2. The degree to which they can own big sellers on their platforms is limited.

Select the correct answer using the code given below:

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2