The government claims that inflation will not rise during the festive period… and has issued this instruction to businesses

With the festive season around the corner in India, people are worried about the impact of inflation. Not only that, the government has recently decided to increase customs duty on edible oil and other commodities, further increasing the tariffs. But now the government claims that inflation will remain under control during this festive season, that is, the burden on the country’s general public will not increase. Instructions have also been issued to companies and traders engaged in commodity business for this purpose.

Why do fears of rising prices linger?
On Wednesday, the government claimed that prices of basic commodities will not rise during the festive season and prices of wheat, rice, sugar and edible oil will be under control. It is worth noting that the government has recently increased import duty on edible oil, which has increased the possibility of edible oil price increase. However, the Ministry of Food and Consumer Affairs claimed that the prices of wheat, rice, sugar and edible oil remain under control, which is a relief. The Ministry of Commerce was informed that on Tuesday, it had asked edible oil companies not to increase prices for the time being.

How much has the government increased tariffs?
It is worth noting that the government led by Prime Minister Narendra Modi recently made a major decision to increase the tariff on edible oils, both crude and refined. The products that were increased this time include sunflower oil, palm oil and soybean oil. The Ministry of Finance issued a notification stating that after the tariff adjustment, the new tax rate will be implemented from September 14, 2024.

The basic customs duty on crude oil is 0-20%, while the basic customs duty on refined oil products is 12.5-32.5%. After the basic customs duty is increased, the actual customs duties on crude oil and refined oil products will increase from 5.5% to 27.5% and from 13.75% to 35.75%, respectively.

Government says – zero tariff oil exists
The ministry said that it has instructed companies and traders dealing in these products not to increase the prices. If the efforts are successful, the prices of essential commodities will remain stable during the festive season this year. According to the government, the industry has 3 million tonnes of imported edible oil at zero duty, which is enough to meet the domestic consumption for 45 to 50 days. Let us tell you here that on Tuesday, the Central government advised the Edible Oil Union to keep the recommended retail price of oil stable until the stocks of imported edible oils are 0% and the basic customs duty of 12.5%. The government will not sell wheat in the open market and currently traders have 1 million tonnes of wheat in their hands.