India mulls duty cut on several items to tame inflation

March 31st, 2008 - 4:52 pm ICT by admin  

New Delhi, March 31 (IANS) India is considering a further import duty cut on essential commodities, especially food items, and reducing duties on important food products to zero, Commerce and Industry minister Kamal Nath said. The cabinet committee on prices will discuss these possibilities at a meet scheduled Monday evening.

The government had been taking several steps for the last two weeks in order to check rising prices leading the inflation rate to hit a 14-month high of 6.68 percent for the week ending March 15 as against 5.92 percent in the preceding week.

“There is an increase in international prices. This has to be met with import duty calibration, which we are considering. The supply side is being affected and our import duties have to be calibrated in response to international prices,” the minister told reporters here Monday.

“With the international prices being steep, we are looking at cutting our duties on many products on the food front … on edible oil, on a whole range of products, in fact bring them to zero if necessary because we have to ensure that the price rise here is maintained and is not affected by global price increases,” Nath added.

Two weeks back the government had lowered import duties on edible oils including palm oil from 45 to 20 percent.

It had also taken steps to restrict the exports of non-Basmati rice. It has even withdrawn tax incentives to encourage exports of steel, chemical and other 40-50 items.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.

“We have to consider reduction in a whole gamut things … steel, cement, edible oil, wheat, rice. We have to meet our demand requirements, our food buffer stocks. We are going to consider all that,” the minister said referring to the issues that would be discussed at a meeting of leading ministers and officials Monday evening.

The meeting would be held to discuss ways to work out a method to tame rising prices of commodities, which has led to large-scale protest from the government’s political allies as well as the opposition.

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