Inter-ministerial Group Formed to Review Inflation Situation

Prime Minister Manmohan Singh set up an inter-ministerial group under the Chief Economic Adviser to the Finance Ministry on 13 January 2011 to review the inflation situation with particular reference to primary food articles. The inter-ministerial group is expected to assess international tariff trends and recommend action on the fiscal, monetary, production, marketing, and distribution and infrastructure fronts to prevent price spikes. The inter-ministerial group will impose controls on exports and ease restrictions on imports, including tariff reduction wherever necessary with an objective to improve domestic supplies. The ban will continue on export of edible oils, pulses and non-basmati rice.

The States have been asked to consider waiving mandi tax, octroi and other local levies and to reduce commission agent charges and exempt horticulture produce from the Agriculture Produce Marketing Committee Act. The States have also been urged to ensure that strict action is taken under the Essential Commodities Act, 1955, and the Competition Act, 2002, to prevent cartelisation.

Public sector undertakings shall intensify purchases of essential commodities, especially edible oils and pulses, for distribution through their retail network as well as the PDS. Also the help of resident welfare associations and self-help groups will be taken to ensure that supplies reach households with the least intermediation cost.