The Cabinet on Friday approved a proposal to extend stock-piling limit on pulses, edible oils and oilseeds by one year through September 2014.
“The decision would enable state governments to continue to take effective de-hoarding operations under the Essential Commodities Act, 1955, by fixing stock limits/licensing requirements etc. in respect of pulses, edible oils and edible oilseeds. This will help in the efforts being taken to tackle the problem of rising prices and also improve the availability of these commodities to the general public, especially the vulnerable sections,” an official statement said.
India imports more than half of its edible oil and one-fifth of its pulse requirements a year. Its edible oil imports jumped to a record $11.31 billion in 2012-13, while pulse purchases from overseas, too, hit an all-time high of $2.34 billion. So hoarding can significantly affect the prices of these items, especially when the rupee has depreciated 15% since April, worsening risks of imported inflation.
"Since we import edible oil and pulses in large volumes to tide over a domestic shortage, it is only logical that hoarding should continue to be contained effectively. For this, extending the stock-holding limit on these items is necessary, especially in times of high inflation," a government official had told FE earlier this week.
The stock-piling norms, coupled with comfortable supplies following adequate imports and steady global prices, have helped keep domestic pulse and edible oil prices subdued in recent months.
Inflation in pulses dropped 14.40% last month while that in edible oils and oilseeds inched down by 3.86% and 7.22%, respectively. In stark contrast, overall food inflation hit 18.18% in August from 11.91% in July, thanks to spiralling prices of onions and other vegetables.
Apart from pulses, edible oil and oil seeds, the Centre currently allows states to fix stock-holding limits on rice and paddy up to November 30.
However, wheat and sugar have been withdrawn from the ambit of these orders with effect from April 2009 and December 2011, respectively.
In August 2006, the Cabinet had approved the curbs on wheat and pulses, initially for a period of six months. The validity of this order has since been extended from time to time, also incorporating some more essential commodities.