Committing to contain the adverse impact of inflation on the common man, the government has unveiled five immediate steps and five more involving "a somewhat larger horizon" to protect him against the abnormal price rise.

In a statement issued by the Prime Minister's office (PMO) on Thursday, a spokesman said the government has been monitoring the inflation situation "closely" and it is determined to bring down the food prices that are rising frequently at unacceptable rates.

The immediate steps he listed include controls on exports, ease of restrictions on imports, including tariff cut, to improve domestic supplies, review of import and export of all essential commodities on a regular basis, intensified purchase of essential commodities, particularly edible oil and pulses, by the public sector undertakings (PSUs) and continuing their subsidised distribution.

As regards onions that brought tears with an unprecedented rise in the prices, the spokesman said NAFED and NCCF are being given budgetary support to sale them at Rs 35 a kilo from their outlets while arrival of onions from Pakistan will also help cool prices. Import of 1000 tonnes of onions has already been contracted while onion export stands banned. Also stands banned export of edible oils and pulses, as well as non-basmati rice.

Two other immediate measures are:

-- Stringent action against hoarders and black marketers manipulating market prices, under the relevant legal provisions, breaking up cartelisation by large traders, and states urged to take action under the Essential Commodities Act, 1955, and the Competition Act, 2002;

-- Awareness campaign on availability of alternatives at cheaper rates such as yellow peas and involving Residents’ Welfare Associations and Self-Help Groups in distribution of essential commodities to ensure that the supplies reach the households with least intermediation cost.

The government also announced constitution of a committee of secretaries headed by the Cabinet Secretary to review the prices with states and advise the central ministries on close coordination with the state agencies to get direct feedback for taking remedial measures on a fast track.

Also an Inter-Ministerial Group (IMG) was set up under the Chief Economic Adviser, Ministry of Finance to review the overall inflation situation, with particular reference to primary food articles. The IMG will, inter alia, review production/ rainfall trends and build an institutional machinery to read warning signals, assess international trends, recommend action on fiscal, monetary, production, marketing, distribution and infrastructure fronts to prevent price spikes, and suggest measures to strengthen collection and analysis of data and forecasting.

The government pointed out that the only lasting solution to food price inflation lies in increasing agricultural productivity. For this, it has taken up important new schemes, and provided large budgetary support to these, with a view to boosting agricultural production not merely in cereals but also in pulses, oilseeds, vegetables and fruits, milk and milk products, and poultry.

"As incomes rise, demand shifts towards horticultural crops, dairy products. These are perishable and need sustained development of market facilities, cold storage etc, quite different from what is needed for foodgrain," the government underlined.

The measures involving a somewhat larger horizon the government identified are:

-- A scheme to be finalised urgently to support the state governments to set up farmers’ mandis and mobile bazaars and to improve the functioning of civil supplies corporations and cooperatives;

-- The existing Public Distribution System (PDS) to be suitably strengthened through computerization and other steps, including opening more procurement windows across the country;

-- Urging the state governments to review the Agricultural Produce Market Committee (APMC) Acts and exempting horticultural products from its purview as also waive mandi tax, octroi and other local levies which impede smooth movement of essential commodities and reduce the commission agent charges.

-- Increased investments in cold storages, dovetailed with organised retail chains for quicker and more efficient distribution of farm products and minimising wastage.

-- Stocking of the bumper Kharif 2010 crop and increasing storage capacities.