India mulls duty cut on several items to check inflation

March 31st, 2008 - 7:37 pm ICT by admin  

A file-photo of Manmohan Singh

New Delhi, March 31 (IANS) With inflationary pressure mounting, India is looking at further import duty cuts on essential commodities and to bring down tariffs on food products to zero, Commerce Minister Kamal Nath said Monday. This is among the issues slated to be discussed by the Cabinet Committee on Prices later in the day. The meet is to be chaired by Prime Minister Manmohan Singh.

“There is an increase in international prices. This has to be met with import duty calibration, which we are considering,” Kamal Nath told reporters on the margins of a meeting here.

“The supply side is being affected and our import duties have to be calibrated in response to international prices,” the minister added.

The government has been taking several steps over the past two weeks to check rising prices as the inflation rate hit a 13-month high of 6.68 percent for the week ended March 15, against 5.92 percent in the preceding week.

“With the international prices being steep, we are looking at cutting our duties on many products on the food front,” Kamal Nath said, adding that on items like cooking oils, the tariff may be reduced to zero.

“We are going to look at sugar and cotton,” he said when asked if the government is considering ending export subsidy on some food items.

Two weeks ago, the government had lowered import duties on edible oils including palm oil from 45 to 20 percent. It also restricted the export of non-Basmati rice and withdrew tax incentives given on export of steel, chemical and some 50 other items.

“On steel and cement, we have to ensure that in high construction season the supply demand mismatch is met and for that we have to ensure and calibrate our duties to all our imports and we are going to do that,” Kamal Nath said.

“We have to consider reduction in a whole gamut things - steel, cement, edible oil, wheat, rice. We have to meet our demand requirement, our food buffer stock. We are going to consider all that,” the minister said.

The meeting, chaired by the prime minister, will include Agriculture Minister Sharad Pawar, Finance Minister P. Chidambaram, External Affairs Minister Pranab Mukherjee and Commerce Minister Kamal Nath.

It is expected to discuss ways to work out a method to tame rising prices of commodities that has led to large-scale protest from the government’s political allies as well as the opposition.

Tags: , , , , , , , , , , , , , , , , , , ,

Posted in Business |