Farm min says policy flaw makes govt biggest wheat buyer, seeks CCI probe
A CCI official said the CACP’s proposal is under consideration. “There could be a case (for a CCI probe into the matter). We will study it,” he said.
What adds to FCI’s procurement cost are various taxes and levies imposed by three of the largest wheat producing states: Punjab, Haryana and Madhya Pradesh.
Including market fee, agent commission, value-added tax and rural/infrastructure development cess, the tax incidence in Punjab is the highest at 14.5%, followed by 11.5% in Haryana and 9% each in Uttar Pradesh and Uttarakhand. A special bonus of R100 per quintal (about 8% of the MSP) given by Madhya Pradesh enabled it to become the second biggest wheat procurer in the marketing year 2012-13, only to cause an acute storage crunch and wastage of the grain.
“Around Rs 7,000 crore or 10% of the food subsidy in 2011-12 has been collected in the year from FCI through levies in states like Punjab, Haryana, AP and MP,” CACP said in its “Price policy for rabi crops” report.
Haryana, Punjab, Uttar Pradesh, Madhya Pradesh and Rajasthan account for about 98% of the total wheat procurement in the country. The CACP also pointed out that in these states where the market prices of wheat have been ruling below the MSP, 85-90% of the grain arrival is procured by the government, crowding out private players and leashing market forces. The commission also expressed doubts about the efficacy of the price policy in terms of ensuring remunerative prices to
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