The retail inflation touched a 15-month high of 7.44% in July, a spike from 4.87% in June. File
| Photo Credit: PTI

The government expects vegetable prices to start cooling off from next month with the advent of new crops in the market, but rising crude oil prices is a concern even though it is still within the tolerable zone of $90 a barrel, a Finance Ministry official said.

The official further said that reduction in excise duty is not on cards and the government is driving infrastructure investment, and private sector capital investment is yet to gather steam.

Also Read | To curb price rise, Centre releases more grain stock under open market sale

He further said that the Centre’s capital expenditure which was 28% of Budget estimates at the end of June quarter, will reach 50% by September end. In the 2023-24 budget, the government had hiked capital investment outlay by 33% to ₹10 lakh crore in the current fiscal.

The official further said that a 6% rainfall deficit is unlikely to impact kharif sowing as the agriculture sector is resilient. The government has been taking steps to control inflation, including releasing wheat and rice stocks from reserves, putting restrictions on exports of rice, sugar, and allowing import of pulses and oilseeds.

“Flexible trade policy has been adopted to keep prices down. We must remember that global food prices are very high due to the Ukraine war and the supply of food grains has been affected and that is a global factor from which Indian cannot remain isolated. We have taken measures to isolate our population from that inflation and relative to others we are in a much better position,” the official told PTI.

He said interventions have been made to cool tomato prices and those steps will bear fruit in the coming months. Tomato is a seasonal crop and we will get another crop shortly and the price pressure will ease.

“This temporarily high inflation is partly driven by vegetables. I expect the vegetable prices will contract quickly, likely by next month,” the official added.

The retail inflation touched a 15-month high of 7.44% in July, a spike from 4.87% in June. However, wholesale price based inflation continued in the negative zone for the fourth straight month at (-)1.36% in July.

In July, the annual retail inflation in the vegetables basket was at 37.44%, spices at 21.63%, pulses and products at 13.27%, and cereals and products at 13%.

To a question on whether the government is concerned about the recent surge in crude oil prices, the official said that budget calculations do not include crude oil prices because the government does not give subsidies to oil marketing companies. So the fluctuation in crude prices does not have any impact on fiscal math.

Crude oil prices currently are hovering around $85 per barrel as against $70-73 a barrel at the time of budget.

“Rising crude oil price is a concern but they are still within a tolerable zone from the point of view of oil marketing companies. It doesn’t necessitate any policy adjustment right now. The budget calculations are on track. I think we are quite ok with oil at about $80-85, up to $90 we shouldn’t be worried. Beyond $90 it has an impact on inflation and other things,” the official said.

The official also ruled out any cut in excise duty on petrol and diesel, saying it is not under consideration as of now. “We are not expecting any excise duty cut in petrol, diesel,” he added.

The Centre started to sell tomatoes at a discounted rate of ₹90 per kg in Delhi-NCR through mobile vans.
| Photo Credit: Sandeep Saxena

The Centre will sell tomatoes at ₹80 per kg from July 16, as against ₹90 per kg earlier, to provide relief to people from high prices of the key kitchen item in retail markets.

On Friday, the Centre started to sell tomatoes at a discounted rate of ₹90 per kg in Delhi-NCR through mobile vans. More cities were added on Saturday.

Also read | The lingering bitter taste of price rise

“There has been a decrease in the wholesale prices of tomatoes due to the intervention of the government to sell it at a concessional rate of ₹90 per kg, at several locations in the country where the prices were ruling exceptionally high,” an official statement said.

“After a re-assessment of the situation from across 500 plus points in the country, it has been decided to sell it at ₹80 per kg from today Sunday July 16th, 2023,” it added.

Sales have started on Sunday at several points in Delhi, Noida, Lucknow, Kanpur, Varanasi, Patna, Muzaffarpur and Arrah through cooperatives NAFED and NCCF, the statement said.

The sale of tomatoes at discounted price will be expanded to more cities from Monday depending upon the prevailing market prices at such locations.

“The government of India is committed to provide relief to the consumers,” the statement said.

The National Cooperative Consumers’ Federation of India (NCCF) and National Agricultural Cooperative Marketing Federation of India (NAFED) are selling tomatoes on behalf of the Centre through mobile vans.

Prices of tomatoes in the retail market remain at an elevated level of up to ₹250 per kg across major cities due to monsoon rains and lean season.

Also Read | Tomatoes to be sold through 82 fair price shops in Chennai at ₹60 a kg from July 4

The all-India average price stood at nearly ₹117 per kg on Saturday, according to the government.

As per the data compiled by the Department of Consumer Affairs, the average all-India retail price of tomatoes was ruling at ₹116.86 per kg on Saturday, while the maximum rate was ₹250 per kg and the minimum was ₹25 per kg. Modal price of tomatoes was ₹100 per kg.

Among metros, tomatoes were ruling at ₹178 per kg in Delhi, followed by ₹150 per kg in Mumbai, and ₹132 per kg in Chennai.

The maximum price of ₹250 per kg was in Hapur.

Tomato prices normally shoot up during July-August and October-November periods, which are generally lean production months.

Supply disruption caused due to the monsoon has led to a sharp rise in the rates.

Speaking to PTI, NCCF Managing Director Anice Joseph Chandra said tomatoes are being procured from Madanapalli (Andhra Pradesh), Kolar (Karnataka) and Sanganeri (Maharashtra) NCCF has already sold 35,000 kg of tomatoes in the last two days. It expects to sell 20,000 kg in Delhi-NCR on Sunday, 15,000 kg in Varanasi, 10,000 kg each in Lucknow and Kanpur, she said.

NCCF sold about 7,000 kg in Lucknow on Saturday and this itself helped to bring down the wholesale rate from ₹130 per kg to ₹115 per kg, she noted.

Joseph Chandra said, “Further reduction in the price to ₹80 per kg will further cool down the prices in the coming days. We will continue to intervene till the price stabilizes.” Currently, NCCF is selling tomatoes through its mobile vans and 4-5 outlets owned by NAFED in Delhi-NCR. It will start the sale via retail outlets of Kendriya Bhandar from Sunday.

Also Read | June inflation quickens to 4.8% as food prices climb

Southern and western regions contribute 56% to 58% of tomato production. File
| Photo Credit: The Hindu

After tomato prices rocketed to ₹200 per kg in some cities, the Centre decided on Wednesday to use its agencies to procure stocks from Andhra Pradesh, Karnataka and Maharashtra and sell them at a discount in the areas where prices remained high.

Rains and floods in Himachal Pradesh have caused transportation disruptions, leading the prices to rise further in northern cities. Bathinda in Punjab recorded the highest price — ₹203 for a kilo of tomatoes — in the country on July 12. The national average price of the day was ₹111.71. Last year, on the same date, the price was ₹40.83.

Also Read | Centre invites ideas from public to curb tomato prices

The Department of Consumer Affairs directed the National Agricultural Cooperative Marketing Federation (NAFED) and the National Cooperative Consumers Federation (NCCF) to immediately procure tomatoes from markets in Andhra Pradesh, Karnataka and Maharashtra for distribution in major consumption centres where retail prices have recorded the biggest increase in the last one month. “The stocks of tomato will be distributed through retail outlets at discounted prices to the consumers in Delhi-NCR region by Friday,” a government release said.

According to data shared by the Ministry, Himachal Pradesh is the only State where tomatoes are harvested in July. The Ministry had said earlier that the increase in price is seasonal and would come down when stocks from Himachal Pradesh reached vegetable markets in the northern parts of the country. “The prices will stay high for the next 15-20 days. It will not go higher,” the official said.

The Ministry said targeted centres for release have been identified on the basis of absolute increase in retail prices over the past one month in centres where prices are above the all-India average. The Ministry said southern and western regions of the country contribute 56% to 58% of all India production. “Southern and western regions being surplus States, feed to other markets depending on production seasons,” the Ministry said. It added that supplies are coming mostly from Maharashtra’s Satara, Narayangaon and Nashik areas and stocks are expected to last till July end.