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Rediff News  All News  » Business » Govt may replace rice with wheat in ration shops

Govt may replace rice with wheat in ration shops

May 22, 2008 01:36 IST

As part of steps to control inflation and augment availability of essential commodities, the government is considering re-allocating wheat in place of rice for the Targeted Public Distribution System (TPDS) and other welfare schemes.


A government official said the move was aimed at allowing people who have been allocated rice to switch to wheat, given that wheat availability has increased. Procurement during the current season was at 17.1 million tonnes as on May 6 against 8.78 million tonnes procured in the corresponding period last year. This 94 per cent increase is especially sizeable given that procurement during all of 2007-08 was only 11.12 million tonnes. 


Rice procurement during the current kharif marketing season rose 9 per cent to 23.27 million tonnes as on May 5 over the corresponding period last year. In view of the lower levels of rice stocks in the central pool, the  department of food is considering the move, which analysts say could be opposed by states where rice is the staple diet.


The government is also exploring the possibility of providing wheat instead of rice in response to requests from other countries. It may also consider importing rice from Bangladesh.


In other steps aimed at cooling inflation of food prices, the government is also considering distribution of pulses at subsidised rates. Pulses, as a group, have seen a decline in the wholesale price index-based annual rate of inflation by 2.4 per cent as of April 19, 2008, over the corresponding period last year.


In order to provide relief to poor people, the department of consumer affairs has also been asked to pursue

a distribution plan similar to the one for edible oil that involves importing edible oil and distributing it as subsidised prices.


Two states -- West Bengal and Tamil Nadu  -- have responded to this plan, while other states are considering it. Public sector agencies have already contracted 1.37 million tonnes of pulses so far, of which 1.19 million tonnes have arrived.


The edible oil scheme was approved by the Cabinet Committee of Prices on March 31. Recently, a meeting of the committee of secretaries held here took stock of the scheme. As many as 10 state governments have confirmed that they will require 96,996 tonnes of various edible oils every month.


Public sector companies have already placed orders for about 104,000 tonnes of RBD palmolein and crude soyabean oil. Deliveries are expected to begin from the end of this month and distribution from the first fortnight of June.


The oil distribution is expected to augment availability and impact domestic prices of edible oil, which had gone up sharply and contributed to the recent inflation spike.


As of May 6, the wholesale prices of mustard oil declined to Rs 6,374 a quintal against Rs 6,410 a quintal in the previous week. The price of groundnut oil remained steady at Rs 10,769 a quintal.


During the same period, retail prices of mustard oil and groundnut oil were steady at Rs 71 and Rs 120 per kg, respectively.



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