FMC suspended forward trading in these four commodities till September 6. The whole sale price (WPI) based index touched over three years' high of 7.57 per cent for the week ended April 19. ''Barring steel, prices of most commodities are coming down,'' Minister of State for Commerce and Industry Ashwani Kumar told a media conference here today.
He said whole sale price of rice has dipped by 1.64 per cent, wheat by 9.10 per cent, pulses by 7.69 per cent, edible oils by 18.93 per cent, cement by 2.91 in the last two months. Iron and steel price, however, went up by 6.60 per cent from March one to May 6, he added.
Reiterating that checking inflation and controlling price rise was the foremost priority of the UPA government, Mr Ashwani Kumar said even the World Bank's recent report has confirmed that India has successfully managed to maintain food prices at below global levels.
The World Bank yesterday said India has been able to partially insulate consumer from the full onslaught of global food price inflation. "Whereas traditionally India has kept domestic wheat and rice prices above international prices, they now are about 30-35 per cent below the world market prices. Domestic wheat and rice prices are also much more stable than international prices," it said.
The World Bank also said that good harvests matched by good procurement should ease near-term price pressures in south Asian countries, including India.
Accepting price pressure on account of heavy demand in a high growth economy like India's, the Minister said the government is, however, determined to rein in prices to a level that will not cause hardship to common man. He said anti-inflation measures like ban on export of non-basmati rice, raising minimum export price of basmati rice to a 1,000 dollar per tonne and levying export duty, reduction in import duty of crude edible oils to zero level and of refined oil to 7.5 per cent and ban on export of pulses will start showing results in stablising prices in the next few months.
Besides, the government has also reduced customs duty on butter and ghee from 40 to 30 per cent and on maize to zero per cent from 15 per cent under tariff rate quota of five lakh metric tonnes.
The government had banned export of cement on April 11 to strengthen domestic supply and its effect was visible in Gujarat where per bag price has come down by Rs 10-20, the Minister said, adding signficant reduction was expected in view of assurance given by the manufacturers like steel producers.
Even as the government proposed reduction in excise duty on steel from 14 to eight per cent and import duty from five to zero per cent, the steel producers yesterday reduced the prices of flat products by Rs 4,000 per tonne and of rebars and structurals by Rs 2,000 per tonne.
Referring to steps taken by the Reserve Bank aimed at sucking Rs 18,500 crore from the banking system by raising cash reserve ratio from 7.50 per cent to 8.25 per cent from May 24, Mr Ashwani Kumar said various fiscal and monetary measures besides banning futures trading in four commodities by FMC yesterday and extending ban on foward trading in wheat and rice will help tame price rise and inflation.
He, however, also called for administrative measures to curb proclivity of producers to increase prices.
The Minister said even as all these steps were likely to bring down inflation by a little over one per cent in the coming months, government deterimned efforts to push down inflationn will continue relentlessly.