Govt slashes import duty on crude edible oils

New Delhi, Apr 1: Government has scrapped import duties on edible oil and tightened restrictions on rice exports to rein in inflation that hit a 13-month high of 6.68 per cent last week, a government spokesman said on Tuesday.

The measures were announced after a meeting of the central cabinet in New Delhi late Monday following mounting criticism from the government's communist allies and the opposition. After discussions, Finance Minister P Chidambaram said import duty on all crude edible oil would be slashed to zero with immediate effect. Import duties on maize was cut to zero from 15 per cent, while a ban on exports of pulses was extended for 12 months. All exports of non-basmati rice would be stopped, Chidambaram said, and the minimum export price for basmati hiked to $1,200 per metric tonne from $1,100.

Country had already halted most non-basmati rice exports before the federal cabinet meeting, but had continued some sales to countries such as Sri Lanka and Bangladesh which face acute shortages. On Monday, Bangladesh said it will import 400,000 tonnes of non-basmati rice from India at $430 per tonne by the end of May to sell below cost on the open market in a bid to ease spiralling prices.

A spokesman for the finance ministry said he could not comment on whether the sale was still possible. When asked whether these steps would help contain inflation, Chidambaram said: "I sincerely hope so," a news agency reported. Pressure has been mounting on government to introduce with nearly a dozen states going to the polls this year and national elections due by May 2009.

On Sunday, communists, who extend valuable outside support to the Congress-party led government, threatened to launch national action on April 15 if the government did not act fast enough to control the price rise. The main opposition Bharatiya Janata Party meanwhile threatened country-wide protests from April 7, charging the government with being insensitive to the needs of country's teeming poor and lower middle-class.

OneIndia News