In a concerted action involving the ministries of Finance, Consumer Affairs and Agriculture, the Commerce Ministry withdrew or temporarily suspended the tax refund scheme Duty Entitlement Pass Book - late last night.
"Total number of items on which DEPB benefits have been withdrawn would be running into about 40-50," Commerce Secretary G K Pillai said in New Delhi on Friday. While the country was importing cement at zero duty, it has stopped the export incentives as a precautionary measure.
As for steel, he said: "When there is a shortage in the country and prices are high, why give export incentives." Besides measures to discourage exports, the government is considering more fiscal steps to improve supplies and rein in inflation, he indicated.
Pillai said an empowered Group of Ministers would be meeting on April 2 to consider measures for maintaining adequate supply line in the face of global pressure on prices. "The eGoM would be (reviewing) prices of rice, wheat and procurement of edible oil," he said.
Inflation, based on the Wholesale Price Index, has jumped way above the comfort level of five per cent and touched 6.68 per cent for the week ended March 15. The government has already reduced duties on import of different varieties of palm oil and the duty cut on soya oil would be one of the options to be considered by the eGoM. In one shot, the government has also raised the minimum export price for non-basmati rice from 650 dollars per tonne to 1000 dollars.