New Delhi, December 8: Amid low production worries raised by farmers due to delay in sowing of Rabi crop following the cash crunch seems to have surfaced in government’s plans as Finance Minister Arun Jaitley in Lok Sabha today informed the Modi government’s decision to scrap import duty on wheat.
Arun Jaitely in Lok Sabha said the government seeks “to reduce the import duty on wheat from 10 per cent to nil without an end date, with immediate effect”.
Earlier in September, the import duty of wheat was reduced from 25 percent to 10 percent cent till February 2017, in order to keep a check on prices of essential commodities ahead of the festival season. Now the import duty is reduced to “zero” to improve domestic availability. While India is world’s second largest producer of Wheat.
Though the government has said that the decision is put in line of rising prices and concerns about 2016-17 wheat crop after IMD’s forecast of warmer winter.
Farmers have been drastically affected by the cash shortage caused by demonetisation. Agriculture Ministry also wrote to Finance Ministry for cash release so that farmers could buy better seeds and sow timely for decent produce next year. But the deep cash shock caused by note ban could not bring complete relief to farmers. The opposition parties have already said that demonetisation move may hit the agriculture production next year.
India Wheat Production (2012-2016) in million tonnes
2012 —-> 94.882 MT
2013 —-> 93.506 MT
2014 —-> 95.850 MT
2015 —-> 86.530 MT
2016 —-> 93.50 MT (expected)
Consumer Affairs Secretary Hem Pande welcomed the move and said, “We had recommended long back to bring down the import duty on wheat. There is some increase in retail prices of wheat and wheat flour. The move should increase local supplies and curb price rise.”
Private traders have imported 1.72 million tonnes (mt) of wheat so far and the total in-bound shipments are expected to cross 2 mt this year.
Agriculture ministry had already earlier said that there is no shortage or threat of production and still puts up wheat output at 93.50 mt. But the current move by the government certainly highlights that the government is already wary about falling agriculture output next year.