Consumer Affairs Minister Piyush Goyal addressed concerns surrounding the newly imposed 40% export duty on onions during a press briefing today. Countering claims by political adversaries who allegedly misrepresented the situation, he called upon farmers to avoid panic selling.
Minister Goyal clarified that the duty aims to safeguard consumer interests in the face of rising onion prices. Simultaneously, the government has green-lighted the purchase of an additional 2 lakh tonnes for the buffer stock, a move intended to stabilise market dynamics. This procurement, Goyal emphasised, would be at an “historical rate” of Rs 2,410 per quintal, considerably higher than the typical Rs 1,800-1,900 received from exports.
Previously, on August 19, the central administration had imposed the export tax on onions to enhance domestic availability, amid predictions of reduced kharif output and increasing retail prices. Subsequent to this decision, the onion buffer stock is slated to be ramped up to 5 lakh tonnes for 2023-24 from the previously procured 3 lakh tonnes. This move, however, was met with protests from farmers and traders, particularly in Maharashtra’s Nashik district.
Goyal sought to reassure the stakeholders, stating, “Both consumers and farmers are pivotal for us… The government’s decisions prioritise the welfare of both parties.” Furthermore, he mentioned ongoing discussions with Maharashtrian governmental figures regarding the situation. For exports stranded at ports due to the sudden duty imposition, decisions will be made based on shipments processed prior to the announcement.
In tandem with these efforts, Goyal announced the release of buffer onions at a subsidised Rs 25 per kilogram in Delhi-NCR markets, a move aimed at protecting consumers from soaring prices.
Maharashtra’s Agriculture Minister Dhananjay Munde echoed Goyal’s sentiments, projecting that despite the duty, farmers would attain favourable prices, ensuring consumers receive onions at reasonable rates. From April to August this year, 9.75 lakh tonnes of onions have been exported, predominantly to Bangladesh, Malaysia, and the UAE. In a related update, the finance ministry’s Monthly Economic Review for July signalled a transitory nature of price pressures on food items, including tomatoes. However, the report acknowledged the need for the government and the RBI to maintain vigilance considering the potential prolonged inflationary pressures. With India’s southwest monsoon season tracking 6% below the long-term average up to August 18, 2023, and factors like the termination of the Black Sea Grain deal by Russia, there are several dynamics at play influencing food prices. The finance ministry remains hopeful, citing the agricultural sector’s momentum with monsoon and kharif sowing progression.
Lastly, with a view to long-term economic growth, the government’s capital expenditure initiatives seem set to invite more private investments. The PLI scheme targeting 14 crucial sectors, alongside PM Gati Shakti and the National Infrastructure Pipeline, anticipates engaging significant private sector contributors in infrastructural development in the
coming years.
