Concerned over the huge difference between wholesale and retail prices of farm produce,Finance Minister Pranab Mukherjee on Thursday said the government would be looking at various options to deal with the problem.
"There is a huge cost of intermediation from farm gate to kitchen....Discussion is necessary to address this problem. Suggestions are needed from MPs, chief minsters and those who are involved," he said, intervening in a special discussion on price rise in the Lok Sabha.He wondered what poor farmers could be getting as there is a huge gap of Rs 6 to 7 per kg in mandi (wholesale) and retail prices.
Mukherjee invited suggestions from various stakeholders, including representatives of people, to deal with the problem of high intermediation cost and bridge the difference between mandi and retail prices.
Responding to opposition criticism on delay in enactment of the Food Security Act, he said, "People have voted us back not for seven or nine months but for full five years."
The government "is committed (to enact the Food Security Act)", he said, adding the move was delayed on account of drought and rising commodity across the globe. "This is not the proper time," he added.
The issue of price rise rocked Parliament for two days as the opposition insisted that the debate be taken up through adjournment motion, which involves voting.
Mukherjee intervened in the Rajya Sabha also, where he said due to measures taken by the government, the impact of inflation will be moderated.
The UPA in its election manifesto promised to enact Food Security Act to provide 25 kg of wheat or rice every month at Rs 3 per kg to families below poverty line.
In the Rajya Sabha, Mukherjee said steps taken by the government to improve supplies and Reserve Bank's measure to suck Rs 36,000 crore from the system will help in containing price rise.
"I do hope it will have some moderating effect on inflation," he added.
The government over the years abolished import duty on various items like wheat, rice, pulses and sugar to increase supplies, while the RBI in its recent credit policy review raised by 0.75 per cent the Cash Reserve Ratio (CRR), the amount that banks keep with the RBI.
Elaborating on need to reduce gap between mandi and retail prices, he said, there must be a "permanent mechanism" to deal with the situation.
Mukherjee said that at a recent conference of Chief Ministers, it was decided to set up a small group to work out ways to reduce the intermediation cost.
The states, he added, should take advantage of the scheme to provide pulses and edible oil to ration card holders at subsidised rate. "Only nine states have taken advantage of the subsidised edible oil scheme," he said. PTI
