MUMBAI (Reuters) - India on Monday proposed to spend 2 billion rupees to subsidies pulses imports in 2009/10, in an attempt to increase domestic supplies and curb spiralling prices on a drop in output, industry officials said.
The government provides a 15 percent subsidy to state-run agencies for pulses imports, which allows them to buy the commodity at higher prices in the overseas market and sell it at lower levels in the domestic market.
"The provision (of 2 billion) is for subsidy on import of pulses by NAFED, MMTC Ltd. STC of India Ltd., PEC Ltd," the government said in the budget document on Monday.
The government did not provide any subsidy for pulses imports in 2008/09.
The country's pulses output in 2008/09 is estimated to have fallen by 3.9 percent on year to 14.18 million tonnes.
"International prices are far higher than domestic prices. The subsidy will help government agencies increase purchases," K.C. Bhartiya, president, Pulses Importers' Association of India, said.
Battling rising prices, India, the world's biggest producer, consumer and importer of pulses, allowed duty-free pulses import and banned export of pulses in 2006 and extended it till March 2010.
Trade estimated the country had imported about 2.5-3 million tonnes of pulses in 2008/09.
Source : REUTERS