New Delhi: In a significant move, the Indian government initiated the sale of ‘Bharat’ Atta (wheat flour) at an affordable maximum retail price (MRP) of ₹27.50 per kilogram. This development was announced during a ceremony held on October 23, 2023, at Kartavya Path, New Delhi.
Union Minister Piyush Goyal, responsible for Consumer Affairs, Food, Public Distribution, Textiles, and Commerce and Industry, flagged off a fleet of 100 mobile vans dedicated to the sale of ‘Bharat’ Atta. This launch aligns with the government’s continuous efforts to support ordinary consumers by stabilizing the prices of essential commodities.
Under this initiative, ‘Bharat’ Atta will be made available to consumers at an MRP not exceeding ₹27.50 per kilogram. This move is part of a series of measures taken by the Government of India to ensure the welfare of the common people. The retail sale of ‘Bharat’ brand Atta is expected to bolster supplies in the market at reasonable rates and contribute to maintaining the affordability of this crucial food item.
‘Bharat’ Atta can be obtained at all physical and mobile outlets of Kendriya Bhandar, National Agricultural Cooperative Marketing Federation of India (NAFED), and National Cooperative Consumers Federation of India (NCCF), starting from the launch date. Additionally, plans are underway to expand its availability to other cooperative and retail outlets.
Furthermore, as part of the Open Market Sale Scheme (OMSS), the government has allocated 2.5 lakh metric tonnes (LMT) of wheat at ₹21.50 per kilogram for semi-government and cooperative organizations, including Kendriya Bhandar, NCCF, and NAFED. This wheat will be converted to ‘Bharat’ Atta and offered for sale to the public under the ‘Bharat Atta’ brand, ensuring that the MRP does not exceed ₹27.50 per kilogram.
Speaking on this occasion, Minister Goyal emphasized the government’s commitment to stabilizing the prices of essential commodities. He mentioned that various measures have been taken in the past to address price fluctuations in items such as tomatoes and onions. Moreover, he highlighted the government’s ongoing efforts to provide Bharat Dal at ₹60 per kilogram through Kendriya Bhandar, NAFED, and NCCF, aiming to offer relief to consumers.
Minister Goyal also underscored the significant benefits that these initiatives have had on farmers. He explained that the government procures farmers’ produce and then provides it to consumers at subsidized rates, ensuring fair prices for both. This approach has contributed to the stabilization of prices for various essential commodities. Minister Goyal acknowledged Prime Minister Narendra Modi’s vision, which prioritizes the welfare of both consumers and farmers.
Background:
The Government of India has been actively taking steps to stabilize the prices of essential food grains while ensuring fair prices for farmers. ‘Bharat Dal’ (Chana dal) is already available at a rate of ₹60 per kilogram for 1kg packs and ₹55 per kilogram for 30kg packs through the outlets of Kendriya Bhandar, NAFED, and NCCF. Additionally, onions are available at ₹25 per kilogram.
The government’s policy interventions aim to benefit both farmers and consumers. The Minimum Support Price (MSP) for food grains, pulses, coarse grains, and millets is set by the government, and nationwide procurement operations are conducted to ensure farmers receive the MSP. In the previous fiscal year, 262 lakh metric tonnes of wheat were procured from over 21 lakh farmers at a declared MSP of ₹2125 per quintal. In the same period, 569 LMT of rice was procured at a declared MSP of ₹2060 per quintal for Grade ‘A’ paddy. These procurement efforts ensured fair prices to farmers and helped maintain a buffer stock for the Public Distribution System.
The government also takes measures to benefit ordinary consumers who are not covered under the Targeted Public Distribution System (TPDS). The sale of ‘Bharat Atta,’ ‘Bharat Dal,’ and tomatoes and onions at affordable prices is one such measure. To date, 59,183 metric tonnes of dal have been sold, benefiting ordinary consumers.
The Food Corporation of India (FCI) conducts nationwide weekly e-auctions for the sale of wheat under OMSS (D). The e-auctions are exclusive to wheat processors such as Atta chakkis and roller flour mills. FCI offers FAQ and URS wheat for sale at ₹2150 and ₹2125 per quintal, respectively. The intention is to ensure that purchased wheat is directly processed and provided to consumers at affordable prices. To date, 65.22 LMT of wheat has been released into the open market as per government directives.
In a significant move, the government has increased the total wheat allocation for sale under OMSS (D) to 101.5 LMT until March 2024, up from the previous 57 LMT until December 2023. The government has also announced its willingness to offload an additional quantity of up to 25 LMT (on top of 101.5 LMT) from the buffer stock if needed by March 31, 2024.
To ensure sufficient domestic availability of wheat, the government has banned wheat exports and imposed limits on wheat stock holding by various entities, such as wholesalers, traders, processors, retailers, and large chain retailers, to prevent hoarding. Stock levels are closely monitored to guarantee regular supplies and avoid stockpiling or hoarding, thus preventing price increases in the wheat market.
The government has also banned non-basmati rice exports and set a floor price of USD 950 for Basmati rice exports. The Food Corporation of India (FCI) offers rice for sale in the weekly e-auctions, aiming to enhance the domestic rice market’s availability.
The government’s unwavering commitment to the welfare of sugarcane farmers and domestic consumers is evident in the payment of over ₹1.09 lakh crore to farmers, clearing more than 96% of cane dues from the last sugar season. This has resulted in the lowest cane dues pendency in the history of the sugar sector. Indian consumers are also benefiting from some of the world’s most affordable sugar prices. While global sugar prices have surged by about 40% in a year, sugar prices in India have increased by just 2% in the last 10 years and less than 5% in the past year.
The government closely monitors the domestic retail prices of edible oils to ensure that the benefits of decreased international prices are passed on to end consumers. Several measures have been taken to control and ease the prices of edible oils in the domestic market. These measures include reducing basic duties on crude palm oil, crude soybean oil, and crude sunflower oil, as well as reducing the agri-cess on these oils. The duty structure has been extended until March 31, 2024. In addition, the basic duty on refined soybean oil and refined sunflower oil has been reduced, and the extension of these duty reductions has also been confirmed until March 31, 2024.
The government has extended the free import of refined palm oils to maintain availability, and it has also reduced the import duty on refined sunflower oil and refined soybean oil.
International prices of major edible oils, including crude soybean oil, crude sunflower oil, crude palm oil, and refined palm oils, have been decreasing. The retail prices of refined sunflower oil, refined soybean oil, and RBD palm oil have decreased by 26.24%, 18.28%, and 15.14%, respectively, over a year, ensuring that consumers benefit from these reductions.
The Department of Consumer Affairs continuously monitors daily retail and wholesale prices of 22 essential food commodities through 545 price monitoring centers across 34 states and union territories. These prices are analyzed to make informed decisions, such as releasing stocks from the buffer to stabilize prices, imposing stock limits to prevent hoarding, and making changes to trade policy instruments like import duty adjustments and quota restrictions.
The Price Stabilization Fund (PSF) has been established to mitigate the volatility in the prices of agricultural and horticultural commodities and ease the hardships faced by consumers. The PSF has three key objectives: promoting direct purchases from farmers and farmers’ associations, maintaining a strategic buffer stock to discourage hoarding, and protecting consumers by supplying these commodities at reasonable prices through a calibrated release of stock. Both consumers and farmers benefit from the PSF.
Since the establishment of the PSF corpus in 2014-15, the government has provided budgetary support of ₹27,489.15 crore for working capital and other expenses related to the procurement and distribution of agricultural and horticultural commodities.
Under the PSF, dynamic buffer stocks of pulses (Tur, Urad, Moong, Masur, and Gram) and onions are maintained. The calibrated release of stocks from pulses and onion buffers has ensured the availability and affordability of these items for consumers and has also contributed to providing fair prices to farmers.
To stabilize tomato prices and make them available to consumers at affordable rates, the government procured tomatoes under the Price Stabilization Fund and provided them at highly subsidized rates to consumers. The National Cooperative Consumers Federation (NCCF) and National Agricultural Cooperative Marketing Federation (NAFED) procured tomatoes from markets in Andhra Pradesh, Karnataka, and Maharashtra, and then made them available at reasonable prices in major consumption centers in Delhi-NCR, Bihar, Rajasthan, and other regions. The initial retail price of tomatoes was ₹90 per kilogram, but it was successively reduced to ₹40 per kilogram to benefit consumers.
To address onion price volatility, the government maintains an onion buffer under the PSF. The buffer size has been increased each year, from 1.00 LMT in 2020-21 to 2.50 LMT in 2022-23, and is further enhanced to 5 LMT in 2023-24. The onions from the buffer are released in major consumption centers during the lean season from September to December in a controlled and targeted manner to stabilize prices. As of October 28, 2023, approximately 1.88 LMT of onions has been dispatched to destination markets for disposal. Additionally, the government has decided to procure an extra 2 LMT of onions for the PSF buffer in 2023-24, in addition to the existing 5.00 LMT already procured. The government has imposed a Minimum Export Price (MEP) of $800 per ton on onions to control price increases and improve domestic market supplies.
To ensure sufficient domestic availability of pulses and moderate prices, the government has kept the import of tur and urad in the ‘Free Category’ until March 31, 2024, and reduced the import duty on masur to zero until March 31, 2024. Stock limits have been imposed on tur and urad under the Essential Commodities Act, 1955, until December 31, 2023. Stocks of chana and moong from the Price Support Scheme (PSS) and Price Stabilization Fund (PSF) buffer are continuously released in the market to stabilize prices. Chana is also supplied to the states at a discount of ₹15 per kilogram for welfare schemes.
Furthermore, the government has introduced a mechanism to convert chana stock into chana dal for retail disposal under the brand name ‘Bharat Dal.’ It is available at a highly subsidized rate of ₹60 per kilogram for 1kg packs and ₹55 per kilogram for 30kg packs. This initiative aims to make pulses available to consumers at affordable prices by converting government-owned chana stock into chana dal. ‘Bharat Dal’ is distributed through retail outlets of NAFED, NCCF, HACA, Kendriya Bhandar, and Safal. Chana dal is also made available to state governments for distribution under their welfare schemes, police, jails, and through the retail outlets of state government-controlled cooperatives and corporations.
The Government of India is dedicated to ensuring the welfare of farmers, PDS beneficiaries, and ordinary consumers by guaranteeing minimum support prices for farmers, providing free rations under PMGKAY for Antyodaya and Priority households, and maintaining fair and affordable rates for wheat, atta, dal, onions, tomatoes, sugar, and edible oils for ordinary consumers.