OMSS wheat prices high due to high state taxes: govt

The government today said that price of wheat sold in the open market for bulk consumers through the open market sale scheme (OMSS) could come down if state governments reduce their respective domestic taxes.

Replying to a question in the Lok Sabha, minister of state for food (independent charge) K V Thomas said that the government is releasing around 7.5 million tonnes of wheat and rice for both bulk consumers and retail traders in the open market to cool down prices. “Wheat traders did not purchase wheat when supplies were abundant but instead want the government to purchase from farmers and sell them at cheap rates,” Thomas said.

He also said that foodgrain damages have considerably come down in the last few years due to relentless effort of the central government and Food Corporation of India (FCI).

Punjab and Haryana levy taxes at the rate of 14.5% and 11.5% for every quintal of wheat purchased from these two states, which contribute almost 80% of the total wheat produced in the country.

Traders said that the wheat under OMSS is being sold to bulk consumers in non-producing states at a price which is inclusive of the minimum support price plus freight and local taxes. In producing states, the price is  MSP plus taxes but without any freight.