Amidst global price rise, food inflation in India has eased to 7.05 per cent in October, which is good news since it affects the consumer price index (CPI) data as well. But more needs to be done, since the overall inflation in India is still above 6 per cent, which is read as a clear failure of the Reserve Bank of India. To assist the banking regulator in relieving the pressure on consumers, the Food Corporation of India may restart the Open Market Sale Scheme for wheat next year.
Why was it paused in the first place?
According to media reports, the food procurement organisation has stopped selling wheat in the open market, because of crop loss hitting availability. The final decision on restarting the scheme and regulating prices, will be taken after a meeting in December. After that, traders will be able to pick up grains in bulk from the government at a pre-determined rate from the market.
The government's stock running out?
The food corporation has only sold 1.3 lakh tonne wheat in the first two quarters of FY23, which is almost 50 per cent lower than last year, as open market sales of the wheat have bene stopped since May.
Wheat stocks in the central government's pool stand at lowest levels in five-years low of 2.1 crore tonnes. The highest retail inflation for October was seen in wheat flour, which is an essential commodity for India, where roti is a staple in various forms.
Government support needed to make a difference
Even a million tonnes of wheat released through the scheme in open markets can make a significant difference to bring down prices and address concerns about food security. Erratic rain patterns across northern India has affected the sowing and harvest of crops in October, which shows how climate change can directly affect food security and also price rise in any country.
