Pulses Importers Association Rejects Subsidy

Mumbai: The Union Government's reported decision to sanction a 15 per cent subsidy to parastatals and public sector trading companies for importing large volumes of pulses is an aberration that is not justified and needs an urgent review. Conceded that the country is chronically short of pulses, in addition to several other commodities; supplies have to be augmented through imports. Pulses imports are absolutely free - under open general license and no customs duty. In its anxiety to be seen as protecting consumer interest and controlling inflation, the Centre has unwittingly sent out a strong bullish signal to the world pulses market about intention to import as much as 15 lakh tonnes through public sector agencies.
The Pulses Importers Association has objected to grant of subsidy and demanded that it be extended to the private trade also. In a free trade regime and in an environment of economic liberalisation, there is no reason to treat Government parastatals differently. Corporates such as STC, MMTC and PEC are well-established trading houses and must do business on merits. Far from advancing competitiveness and efficiency, the subsidy regime will mean supporting inefficient traders over others. Despite a free trade regime, open market rates have remained steady for various reasons including omissions and commissions of policymakers for long years. Pulses poor man's protein did not receive the kind of policy support that was bestowed on fine cereals.

Utter indifference to raising domestic out put has resulted in shortage and dependence on imports. Opening up the market without corresponding and vigorous efforts to create conditions for sustained growth of farm production is sure to result in demand-supply mismatch and unsettled market conditions that may hurt the interests of stakeholders. For instance, public sector companies can begin to undertake procurement of pulses at market rates. Government companies can play a role in this as part of corporate social responsibility.