Prices of wheat, rice slashed by 30 per cent

By Our Special Correspondent

NEW DELHI, JULY 10. In a desperate attempt to improve the offtake of foodgrains from ration shops, the Centre today slashed by about 30 per cent the central issue price of wheat and rice sold to the above the poverty line population (APL) through the Public Distribution System (PDS). It also enhanced the allocation of discounted foodgrains to the below the poverty line population (BPL) by 5 to 25 kg per family a month. There is no change in the issue price for BPL.

These measures, approved by the Cabinet today, might bring the non-poor population back into the PDS fold and will add Rs. 2,700 crores to the food subsidy bill. The lowered APL prices are expected to reduce foodstocks by about 60 lakh tonnes a year, as against zero lifting by APL and about 55 per cent by BPL last year. Foodstocks on June 1 were 604 lakh tonnes, as against the buffer norm of 243 lakh tonnes.

If stocks are lifted as per the calculations of the Food Ministry, the carrying costs will be reduced by Rs. 1,350 crores a year, and additional storage space will be created for the new harvest.

The Government also allowed the Food Corporation of India to offer upto 20 lakh tonnes of wheat this year to roller flour mills for export of wheat products. The FCI has been permitted to offer wheat to mills on the condition that wheat products exported by them will not be less than 65 per cent of the quantity lifted.

It is understood that the base price at which wheat will be sold to flour mills will be Rs. 4,300 a tonne, which is the export price for wheat. The actual price will be arrived at by the high- level committee of the Food Ministry.

The price of wheat for the APL category now is Rs. 610 a quintal against the new economic cost of 872. The price of rationed rice for APL is Rs. 830 a quintal against the economic cost of 1,180. In the BPL category, the price of wheat remains Rs. 415 a quintal and rice 565.

The reduction in the issue price for the APL category will come into effect immediately. The offer would, however, be valid till March 31, 2002. The scheme would be discontinued if stocks are exhausted before that.

Earlier, briefing mediapersons, the Parliamentary Affairs Minister, Mr. Pramod Mahajan, said now the APL price was less by Re. 1 a kg than the market price. There was no proposal, however, to distribute foodgrains free of cost.

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HIGHLIGHTS

* Cut in the prices of PDS rice and wheat for above the poverty line category to clear excess foodgrain stocks.

* Restructure of the Customs and Central Excise Departments to improve revenue mobilisation. Exercise expected to yield five per cent additional revenue every year.

* Additional fund of Rs. 330 crores for construction of two lakh more houses in cyclone-hit Orissa.

* Approval for ratification of agreement on Intelsat (International Telecommunication Satellite Organisation).

* Public sector Telecommunications Consultants India Limited allowed to participate in a joint venture for WLL-based basic telecom services in Nepal.

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