Government to control exports, imports to check prices .

NEW DELHI: The UPA government, battling criticism over spiraling food prices and mismanagement, on Thursday announced a slew of measures aimed at checking rising prices but analysts said the overall impact of the steps would be visible only in the long term.

Alarmed by the sudden spike in vegetable prices that has kept food inflation in the 17-18% range, Prime Minister Manmohan Singh met his top ministers and advisers to thrash out a strategy to calm prices. The government said it will review import and export of all essential commodities and impose controls on exports and ease restrictions on imports, including cutting tariffs where necessary to improve domestic supplies.

The government said it will take strict action against hoarders and black marketers manipulating prices to ensure that products reach the markets in a timely manner to moderate price. Cartelization by large traders will be strictly dealt with and states will be urged to ensure that effective action is taken under the Essential Commodities Act, 1955, and the Competition Act, 2002.

Public sector undertakings will intensify purchases of essential commodities particularly edible oils and pulses for distribution through their retail network and also through the Public Distribution System. Exports of edible oils, pulses and non-basmati rice will remain banned.

Economists said the measures would mean larger outlay for improving agriculture infrastructure in the Union budget to be unveiled on February 28. "The impact of these measures will be visible in the medium and long term. We expect to see larger outlays for agriculture in the budget," Indranil Pan, chief economist at Kotak Mahindra Bank, said.

A government statement said NAFED and NCCF will sell onions at Rs 35 per kg from their retail outlets and budgetary support would be provided for this. The government said the arrival of onions from Pakistan would also help.

An inter-ministerial panel has been set up under the Chief Economic Adviser to review the overall inflation situation. The panel will review trends, read warning signals and recommend action on fiscal, monetary, production, marketing and distribution and infrastructure fronts to prevent any price shock. The committee of secretaries will review the price situation.

Source : timesofindia.indiatimes.com