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Inconsistent decisions

Stock-holding limits on pulses will affect govt's reform credentials

Topics
pulses | Agriculture | Essential Commodities Act

Business Standard Editorial Comment  |  New Delhi 



After allowing free imports of some varieties of pulses, the government last week imposed stock-holding limits on for millers, wholesalers, retailers, and importers till October 31. The limits have been fixed at 200 tonnes for wholesale traders and importers, and five tonnes for retailers. The stock limit for processors/dal millers has been set at the last three months’ production or 25 per cent of annual installed capacity, whichever is higher. The ill-advised decision, which came after the prices of increased sharply in April and May, surprised traders in several mandis across the country, and some went on a flash strike as they will have to sell the stock above the prescribed limit, which could result in losses. Traders and other stakeholders are also not happy with the government’s decision to lower import duty on edible oil. This shows how decision-making in the government is often focused on short-term outcomes. For instance, the move to impose stock-holding has come a bit late in the day because prices have anyway started to come down. Further, it goes against the Essential Commodities (Amendment) Act — one of the three farm reform laws passed last year, which have been opposed by some farm unions. Arguably, had the Supreme Court not stayed the farm laws, the government would not have been able to impose stock-holding limits.

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First Published: Tue, July 06 2021. 22:22 IST

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