The Cabinet Committee on Economic Affairs on Thursday approved open market sale of wheat and rice to combat inflation.

The sale will be conducted after the requirements of buffer and strategic stocks are met. The buffer norm for wheat on April 1 was 4 million tonnes (mt). Creation of a 3 mt strategic stock has also been proposed. The central pool had a wheat stock of 24.38 mt on August 1.

After meeting the monthly requirement of about a million tonne for the August-March period and excluding the stock norms, the Food Corporation of India will be left with a stock of 9.3 mt.

Wheat procurement begins in April.

The ministry of consumer affairs, food and public distribution will decide the quantity and timing of the sale on a recommendation by the committee of secretaries.

Food and Agriculture Minister Sharad Pawar had indicated last month that up to 6 mt wheat could be sold.

The FCI will fix the sale price for state governments, who in turn will sell to retail consumers. The price, however, would not be lower than the minimum support price of wheat, which is Rs 1,000 a quintal, plus cost of rail transport from Ludhiana, the main wheat stocking point in the country, to state capitals.

The FCI will also decide the price for bulk consumers. The statement said a similar policy would be followed for the release of rice under the scheme, whenever it takes place.

The CCEA also approved compulsory packaging of foodgrain and sugar, weighing between 26 kg and 100 kg, in jute bags for the 2008-09 jute year (July-June) with a relaxation of up to 20 per cent in case of a jute shortage. However, exports will be exempt.

To strengthen the ground water management system, the committee approved an outlay of Rs 460 crore (Rs 4.6 billion) for continuation of schemes for ground water survey, exploration and investigation, central ground water authority and study of recharge to ground water during the Eleventh Plan period (2007-12).

In another decision, the Cabinet approved extending stock limits on wheat and pulses for traders and bulk consumers to April 2009. The move is aimed at keeping food prices under check.

The notification, which empowers state governments to impose stock limits on these commodities, was to lapse on August 31. The Cabinet also allowed a ceiling on stocks of paddy, Information and Broadcasting Minister Priyaranjan Dasmunsi told reporters.

Other decisions

• Establishment of National Agri-Food Biotechnology Institute and Bioprocessing Unit in Mohali, Punjab
• National Land Records Modernisation Programme
• Exemption from payment of deployment charges for central forces to the special category states
• Grant of 1997 scales of pay in Bharat Pumps & Compressors Ltd, Naini, Allahabad

Inflation, the silent killer!