Govt moves to curb inflation, hikes export price of onions

The centre has imposed a minimum export price (MEP) of $300 per tonne on the export of onions, in view of the rising trend in the price of onions.

The announcement was made at a high-level meeting convened by finance minister Arun Jaitley to discuss issues related to inflation and price rise of essential commodities on Tuesday.

The hike in export price of onions is expected to increase the availability of onions in the domestic markets and keep prices in check.

Jaitley asked state governments to amend their laws and crack down on speculative hoarding in anticipation of a weak monsoon and boost the supply of fruits and vegetables in open markets.

The meeting also decided that the state government of Delhi be asked to consider delisting fruits and vegetables from the purview of the Agricultural Produce Market Committee (APMC) Act and consider procurement of additional supplies of onions for distribution through government retail outlets.

To arrest the rising tendency in foodgrain prices, the meeting decided to hike the availability of rice by increasing releases through the Food Corporation of India to states for supplies through the public distribution system.

The meeting also reviewed the steady increase in the retail price of milk and decided to consider withholding export incentives that are currently in force.

The finance minister urged that urgent and timely attention be given to all matters related to price rise, and that the departments concerned take necessary steps without any delay.

The finance minister also emphasised the urgency to effectively check constraints in ensuring smooth flow of essential commodities availability in the market through dehoarding, timely inspection, monitoring, etc.

With spiralling inflation, the centre had yesterday asked the states to crack down on hoarders while unveiling a series of measures to check prices of cereals, fruits and vegetables and slapping restrictions on potato and onion exports.

A jump in prices of potatoes and onions last month drove inflation to 6.01 per cent from 5.20 per cent in April, contributing to a sell-off in financial markets.

Jaitley said the government was keeping a close watch on the price movements of 22 commodities and would offload additional rice stocks in the market to prevent a build-up in inflationary expectations.