NEW DELHI : The Government on Thursday threw open doors for wheat imports by totally waiving the import duty to tackle the crisis at hand from the most Indian farmers failing to sow the Rabi crops, including wheat, as they became cashless from demonetisation, with no money to buy seeds or fertilisers.
Finance Minister Arun Jaitley tabled a gazette notification in both the Houses of Parliament on reducing the import duty on wheat from 10% to Nil, without an end date, with immediate effect.
Former union commerce minister Anand Sharma of Congress said it shows an imminent shortage of wheat the government wants to tackle through imports as otherwise India has been rather exporter of wheat all past decade.
The government, however, claimed it were preparing for an imminent shortage of wheat due to a severe drought in the wheat producing states in the last couple of years.
Only in September, the government had lowered the import duty on wheat from 25% to 10% till February. Wheat prices have already started rising in the market, prompting the private traders so far importing nearly 1.72 million tonnes.
The total inbound shipments may cross 2 million tonnes this year.
This is in addition to the Indian flour mills contracting to import three lakh tonnes from Australia and France for shipment in July- September. Last year too, the private millers had purchased about 5 lakh tonnes from Australia for the first time in a decade due to sluggish supply of domestic high protein wheat and lower international prices.
“The government is keeping a close watch on wheat prices. So keeping in mind the recent rise in price trend of wheat, We can rollback the import duty on wheat. We don’t want extra burden on consumers,” Food Minister Ram Vilas Paswan said, unaware of the gazette notification already published earlier in the day to waive the import duty totally.
He, however, underplayed the crisis at hand, noting that the wheat procurement so far was 22.9 million tonnes, which was just 5.1 million tonnes less than 28 million tonnes during the same period a year ago.
Only in March, the government had extended the import duty on wheat by another three months, till June, to curb imports as domestic production was estimated to rise by over 8% this year.
As on April 1, the state-owned Food Corporation of India (FCI) had a stock of 30 million tonnes of wheat, much higher than the actual annual requirement of 7.46 million tonnes.
Despite drought in over 10 states, if the Agriculture Ministry’s third advance estimates are to be believed, wheat production has been pegged at 94.04 million tonnes for 2015-16 crop year (July-June) compared with 86.53 million tonnes in the previous year.