MINISTER OF THE STATE IN THE MINISTRY OF FINANCE
(SHRI P. CHIDAMBARAM)
(a) to (i): A statement is placed on the Table of the House.
STARRED QUESTION NO. 63 (POSITION NO. 3)
STATEMENT REFERRED TO IN REPLY TO
LOK SABHA QUESTION ON MARCH 2, 2007
BY SHRI RAVI PRAKASH VERMA and SHRI J.M. AARON RASHID
INFLATION RATE
(a) & (b) The WPI-based inflation trend for the period from January 2006
to January 2007 is indicated in the Table below.
Table: WPI based monthly rate of inflation (%)
Month Inflation Month Inflation
January, 2006 4.1 August, 2006 5.1
February, 2006 4.0 September, 2006 5.4
March, 2006 3.9 October, 2006 5.5
April, 2006 3.9 November, 2006 5.5
May , 2006 4.7 December, 2006# 5.4
June , 2006 5.1 January, 2007# 6.2
July, 2006 4.8 # Provisional
(c) & (d): To control inflation, Government has reduced duties on various
commodities in the current financial year. The details are at Annexure I.
The total revenue loss due to the mentioned exemptions is estimated to be
about Rs.5000 crores in a full year.
(e) & (f): The High Powered Committee for monitoring prices of essential
commodities has made several recommendations to check inflation.
(g) The recent steps taken by Government to control inflation include:
$ Reduction in retail prices of petrol by Rs. 2 per litre and diesel by
Rs. 1 per litre in November 2006 and again in February 2007.
$ State Trading Corporation contracting for import of 55 lakh tonnes of
wheat to supplement domestic availability, of which 49.4 lakh tonnes had
arrived by February 13, 2007.
$ As against normal applicable duty of 50 per cent, allowing private trade
to import wheat at 5 per cent duty from June 28, 2006, and at zero duty from
September 9, 2006.
$ Decision to release up to 4 lakh tonnes of wheat under Open Market Sale
Scheme in February and March 2007.
$ Ban on export of wheat from February 9, 2007.
$ Reduction in customs duty on import of pulses to zero on June 8, 2006.
$ Ban on export of pulses with effect from June 22, 2006.
$ NAFED importing 49,300 tonnes of pulses. Under a new contract executed
by NAFED in December 2006 to import 30,000 tonnes of pulses, 10,675 tonnes
had been shipped by February 13, 2007.
$ To contain volatility in the futures prices of wheat, sugar and pulses,
Forward Markets Commission (FMC) has imposed limits on open position, reduced
limits on daily fluctuations and imposed additional/special margins.
$ Ban on futures trading in tur and urad from January 24, 2007, wheat and
rice from February 28, 2007
$ Reduction in import duty on palm group of oils by 10 percentage
in August 2006 and by a further 10-12.5 percentage points in January 2007.
Maintaining tariff value for assessing import duty unchanged at July 2006
level.
$ In the Budget 2007-08, crude as well as refined edible oils have been
exempted from additional Counterveiling duty of 4 per cent. Duty on
sunflower oil, both crude and refined, has been reduced by 15 per cent .
$ Ban on export of skimmed milk powder.
$ Steps were taken by Reserve Bank of India to reduce liquidity in the
system by increasing the cash reserve ratio and repo rates.
(h): No, Sir.
(i): Does not arise in view of (h) above.
Annex: 1 Reduction in customs duty to various specified commodities
S.No Commodity General rate Conces- Date on Date till of duty sional duty which conce- which ssion was applicable given
1 Wheat 50% Nil 9.9.2006 28.02.2007
2 Pulses 10% Nil 8.6.2006 31.7.2007
Edible oils
3 Crude Palm oils 80% 70% 11.8.2006 Without time 60% 24.1.2007 limit
4 Refined Palm oils 90% 80% 11.8.2006 Without time 67.5% 24.1.2007 limit
5 Crude Sunflower oil 75% 65% 24.1.2007 Without time limit
6 Refined Sunflower oil 85% 75% 24.1.2007 Without time limit
7 Maize (TRQ of 5 50% Nil 25/1/2007 31.12.2007 lakh MT@ 15%)
8 Sugar 60% Nil 23.6.2006 30.9.2006#
Other Commodities (Changes made in January, 2007)
9 Portland cements 12.5% Nil 22.1.2007 Without time limit
10 Inorganic chemicals 10% 5% 22.1.2007 Without time (Oxygen, Chlorine, etc.) limit
11 Ferro alloys, 7.5% 5% 22.1.2007 Without time Stainless steel limit and other Alloy steel
12 Copper 7.5% 5% 22.1.2007 Without time limit
13 Aluminium 7.5% 5% 22.1.2007 Without time limit
14 Zinc 7.5% 5% 22.1.2007 Without time limit
15 Other base metals 7.5% 5% 22.1.2007 Without time (Tungsten, magnesium limit tin, cadmium etc.)
16 Pipes, tubes, and 12.5% 7.5% 22.1.2007 Without time pipe or tube fittings limit of aluminum, copper and zinc
17 Refractories 7.5% 5% 22.1.2007 Without time limit
18 Raw materials of 10%/ 5% 22.1.2007 Without time Refractories 7.5% limit
19 Capital goods and 12.5%/ 7.5% 22.1.2007 Without time their parts, winding 10% limit wires of Chap 84, 85 and 90
20 Project imports 10% 7.5% 22.1.2007 Without time (Airport development limit projects and Metro rail projects, notified under project imports)
# This date has Not been extended
