Inflation control pays off

Retail prices of most edible commodities decline, stabilise.

The government's inflation control measures have begun to pay off, with retail prices of most edible commodities either declining or remaining stable in the last one month.

However, these prices are still high compared with what they were six month ago and even a year ago. Price of rice, for instance, is still 20 per cent higher compared with the price even six months back.

Moreover, there has been no decline in the prices of rice even after the government banned the export of non-basmati rice and extended the export ban on pulses.

Only sugar prices have increased by Re 1 per kg in the last month, to Rs 18, which is also an increase of Rs 2 per kg, or 12.5 per cent, over the last six months. 
 

COMMODITY PRICES
	April 11 2008	March 11 2008	October 11 2007	April 11 2007
Rice	18	18	15	15
Wheat	13	13	12	12
Gram	38	39	35	33.5
Tur	42	42	39	39
Sugar	18	17	16	17
Mustard Oil	73	87	62	56
Tea	107	108	108	108
Milk	20	20	19	18
Potato	8	8	15	9
Onion	9	9	22	13
Prices in Rs/kg for Delhi Source: Price Monitoring Cell, Department of Consumer Affairs

However, with the recent government decision to allow open market sale of 2 million tonnes of sugar from the buffer stock between May and September, prices are set to soften.

In the last one month, the government has banned the export of edible oil, while making import of crude edible oil duty free. Import duty on refined oil has also been brought down to 7.5 per cent.

The import of basmati rice has been discouraged by an increase in the minimum export price (MEP) to $1,200 a tonne and withdrawal of the duty entitlement passbook (DEPB) scheme benefits. It also empowered the state governments to impose stock holding limits on various commodities under the Essential Commodities Act.

Most of these measures came as a reaction to the rising inflation that touched a 13-month high of 6.68 per cent for the week ended March 15.