we’re talking of R40,000 crore into the finance minister’s coffers. Given the government doesn’t have storage capacity for around a tenth of its stocks, and we’re not even talking of the grain under cover and plinth, selling off 10 million tonnes will also free up valuable space for the next procurement season. That is, if the government doesn’t export the grain, the chances of it rotting are huge.
Why the government has not been able to get greater interest from exporters is not clear—in July, the CCEA had fixed a floor price of $228 per tonne for exports. Given how global prices have been shooting up, the scope for increased exports seems large. From $232 per tonne at the beginning of June, prices touched $340 by the end of July, fell to $307 by November 16 but are now rising again, to $313 yesterday. But if the government finds the bureaucracy is moving with its customary sloth, why not just allow exporters to lift the grain after bidding for it?
Some argue the delays are on account of the fact that bureaucrats are scared of CAG/CVC censure given how volatile global prices are. That may be true but is, at best, a partial explanation. After all, the Empowered Group of Ministers took a decision to lower the reserve price for the spectrum auction by around a fourth and to offer a 42% discount on the market price of Hindustan Copper shares—in other words, if a reasoned explanation is made, there should be no problem.
Unlike disinvestment where the line ministries are coming up with all manner of objections, presumably to retain full control of their PSUs, this seems pretty much a win-win proposition since, apart from the money it will give the finance minister, it will create more storage space for more procurement and will prevent grain from rotting. The only opposition you can think of will come from the rats who will presumably now get less to eat. Presumably that’s a lobby that doesn’t have too many supporters.