Government Takes Steps to Reduce Wheat Prices in India

In an effort to make wheat and atta more affordable for the general public, the Indian government has taken several measures aimed at reducing the prices of these essential commodities. In consultation with the Ministry of Finance, the Department of Food & PD has set a new reserve price of Rs 2350/Qtl for FAQ and Rs. 2300/Qtl for URS wheat. This price does not include transportation costs and will be applicable across India.

Furthermore, states will be allowed to purchase wheat from the Food Corporation of India (FCI) for their own schemes at the above reserve prices without participating in e-auctions. The rate of wheat has also been reduced to Rs. 21.50/Kg for sale to NCCF/NAFED/ Kendriya Bhandar/State Govt. Cooperatives/ Federations and community kitchens/charitable organizations/NGOs involved in relief operations.

As part of these efforts, the government has decided to release 30 LMT of wheat from FCI stocks through the Open Market Sale Scheme (OMSS). Of this amount, 25 LMT will be offered through e-auctions to traders and flour mills, 2 LMT will be offered to state governments for their schemes, and 3 LMT will be offered to Government PSUs/cooperatives/Federations without e-auction. These entities will then be required to convert the wheat to atta and sell it to the public at a maximum MRP of Rs 29.50/kg.

The first e-auction was held on February 1st and 2nd, 2023, and 9.26 LMT of wheat was sold to traders and flour mills. Despite these efforts, the government has noticed that market prices of wheat are still high and that the auction rates in states away from Punjab, Haryana, and Madhya Pradesh, especially in the North-East, Eastern, and Southern regions, are particularly high due to the inclusion of freight charges in the base prices for auction under OMSS.