New Delhi: As part of its efforts to tame inflation, especially in the run-up to the general election, the Centre plans to release 500,000 tonnes of rice that will be available to consumers at discounted rates.
Bharat Chawal, or rice, will be offered to the National Agricultural Cooperative Marketing Federation of India (Nafed), National Cooperative Consumers’ Federation of India (NCCF), and Kendriya Bhandar at ₹24 per kg under the under open market sales scheme (OMSS), two officials aware of the development said.
This could be then retailed at ₹29 a kg to consumers, they added.
The move comes at a time when the all-India average retail price of rice touched ₹43.5 per kg on Thursday, marking an increase of about 14% from a year ago, according to the latest data from the consumer affairs ministry.
The Reserve Bank of India during its rate-setting meeting last month warned of a about a possible resurgence in food inflation. The government has been taking several measures recently to rein in food prices as the Consumer Food Price Index, which accounts for nearly half of the overall consumer price basket, rose to 8.70% in November from 6.61% in October.
“Although the IMC (inter-ministerial committee) agreed that the agencies may be allowed a margin of ₹10.80 above ₹24 per kg and that Bharat Chawal for retail sale can be offered to general consumers at ₹34.80 per kg, the three agencies suggested that the MRP (maximum retail price) should be fixed at ₹29 per kg to achieve sales at scale,” said one of the officials.
“They (government agencies) emphasised that an effective market intervention for price control will require an optimal price difference from prevailing market prices,” the official said.
Additionally, it has been proposed to provide Nafed, NCCF, and Kendriya Bhandar with funds to cover the price difference ( ₹3,480 – ₹2,900). This proposal is to be forwarded to the Committee of Ministers for approval, following which the three organizations can set the maximum retail price at ₹29 a kg, the official added.
“Proposals related to the launch of the scheme and MRP of Bharat Chawal have been given to the concerned higher authorities and a decision is likely within a fortnight,” the other official said.
Queries sent to the food and public distribution department remained unanswered till press time.
Mint had earlier reported about the central government’s plan to sell Bharat rice at discounted rates to tame rising cereal prices ahead of the general election, likely to be held in April-May.
Currently, the government sells wheat flour and chana dal (split chickpeas) to consumers under the Bharat brand at concessional rates of ₹27.50 a kg and ₹60 a kg, respectively. These cereals are sold at more than 2,000 retail points amid concerns over tight supply, which has kept domestic prices firm.
The government has also initiated subsidized retail sales of onion at ₹25 a kg through various channels, including Safal, the grocery chain of Mother Dairy, which is a subsidiary of the National Dairy Development Board.
In the past few months, the government has taken several steps to stabilize prices of essential food grains, while also ensuring fair prices for farmers.
The government banned exports of non-basmati rice in July and imposed an export floor price of $1,200 per tonne for basmati exports in August, which was lowered to $950 a tonne later. Under the OMSS, the Food Corp of India is offering 400,000 tonnes of rice for sale at ₹29-29.73 per kg in its weekly e-auctions to increase the availability of rice in the domestic market.
