Five things the Indian government has done to reduce the burden of inflation

May 25, 2022

By: Vaamanaa Sethi

Inflation rate at an eight-year high

The retail inflation rate had surged to an eight-year high — 7.79 percent in April 2022 due to the on-going Russia-Ukraine war. This has led to a steep rise in the day-to-day household commodity prices.

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High inflation could remain throughout this year

Experts believe that this shooting inflation could remain high through this fiscal year.

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These are the measures taken by the Indian government to curb inflation in the country —

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Duty-free imports of cooking oil

The central government has allowed the import of 20 lakh tonnes of crude soy and sunflower oil per annum, for two years, at zero customs duty. It also cut basic customs duty on crude palm oil – known as poor man’s cooking oil — to 10 percent till September.

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Limit cap on sugar exports

The government also capped sugar exports and also put it in the ‘restricted category’ with effect from June. This move is expected to enable the smooth availability of sugar in the domestic markets.

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Banning wheat exports

On May 14, India put a strict ban on wheat exports with the hope of bringing stability to wheat prices and insulating it against international price movements. However, the government clarified that it doesn’t apply to the commitments already made to vulnerable and needy countries.

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Cut down of excise duty on fuel prices

Finance Minister Nirmala Sitharaman, on May 21, announced a reduction of central excise duty on petrol by ₹8 per litre and by ₹6 on diesel, bringing down retail prices by ₹9.5 and ₹7, respectively.

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Doubling fertilizer subsidies

On May 21, Sitharaman also said the government will give an additional ₹1.10 lakh crore to the farmers as fertilizer subsidies. This subsidy will lower the costs of various items like cereals, pulses and vegetables for farmers in India.

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Analysts say these measures will cut down cost of goods

According to the analysts Business Insider spoke with, the measures taken by the government which includes relaxations, imports, and bans will help in bringing down the cost of goods like cooking oils, food items and even cosmetics.

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