How to control inflation? Centre asks states to remove taxes on essential food items

The Centre has urged the States to remove all the local taxes from the essential goods like pulses and edible oil to ensure availability at reasonable prices.

The Ministry of Consumer Affairs, Food & Public Distribution in a statement, on Sunday, said that in a letter written to Chief Secretaries of the States, Hem Pande, Secretary Union Department of Consumer Affairs has asked states to delist pulses and other essential food items so that farmers can sell their produce at any place of their choice, minimizing stages of supply chain from farm gate to ultimate consumers. 

As per the statement, the move will ensure reasonable prices for consumer and better pricing for the farmers. The Centre invited States' attention towards the action plan adopted for this purpose in the States Food Ministers meeting held in May this year.

"States have also been requested to consider a pricing policy for pulses and such other essential food items under Section 3(2) (c) of the EC Act and to make it enforceable for all the stakeholders to cap the prices of essential commodities", the Ministry said. 

Apart from removing the local taxes, the Ministry has asked the States to implement Price Stabilization Scheme. Under this scheme, the government plans to enhance availability and check market prices of essential goods. 

"For successful functioning of the Scheme, adequate and timely lifting of pulses from buffer stock is a pre-requisite besides strengthening storage facilities for pulses, vegetables edible oils seeds, onions", Pande said.

The Ministry has also told the States to keep a check on hoarding and black marketing of essential commodities in view of coming festival season. 

As ZeeBiz had earlier reported, to curb the prices of pulses, since October 2015 to July, 2016, the government has seized a total of 1.38 lakh metric tonne (MT) of pulses through 14,612 raids. 

Lastly, to keep a close watch, the States have been asked to create Information Management System of prices, production, availability, unscrupulous trading, hoarding, black marketing and to strengthen the Price Monitoring Cells.

For this, the States will have to submit a monthly report to the government to ensure regular review of the same.