Government unveils measures to tackle inflation
Recently to control inflation, sugar exports have been banned, and duty-free imports of sunflower and soybean oils have been allowed.
In order to reduce inflationary pressures, the government has announced the following measures:
- The import of crude soybean and sunflower oil has been exempted from customs duty and Agriculture Infrastructure Development Cess for the next two years.
- Sugar exports have been restricted to 10 million metric tons for the current season.
The current food inflation is due to various reasons. This situation has arisen especially because of constraints on the supply side.
- After the COVID-19 pandemic, the demand for the products has returned to its pre-eminent position. On the other hand, production has come down due to various factors like bad weather, shortage of raw material/input, shortage of labor etc.
- Many countries have imposed restrictions on exports. like; Indonesia imposed a temporary ban on the export of palm oil.
- The prices of oil and other inputs/raw materials have gone up.
- Russo-Ukraine War.
- Although India produces a surplus of food grains and sugar, it is dependent on imports of several commodities such as edible oils to meet the demand-supply gap.
- Therefore, the impact of global increase in the prices of products is felt in India as well.
- It affects the financial condition of the general public. This reduces the purchasing power of the person. Also, it affects savings as well.
- Some other steps have also been taken to control food inflation, such as: Excise duty on petrol and diesel has been cut,
- Export of wheat by private sector has been banned etc.
Source – The Hindu