The government on Monday reduced the basic customs duty on imports of masur dal to zero and halved the agriculture infrastructure development cess on the lentil to 10 percent, with an aim to augment domestic supplies as well as provide "relief to consumers" from high prices. With the reduction in basic customs duty and the cess, the effective import duty on masur dal will come down to 10 percent from 30 percent.
The reduced basic customs duty and cess will come into effect from Tuesday. Notifications in this regard were tabled in both houses of Parliament by Finance Minister Nirmala Sitharaman.
"To give relief to consumers, Government has reduced Customs Duty on Masur Dal from 30 per cent to 10 percent. (Basic Customs Duty reduced from 10 percent to 'Nil' and Agriculture Infrastructure Development Cess reduced from 20 percent to 10 percent). This will bring down the retail price of Masur Dal," the finance ministry said in a tweet.
According to the notifications, the basic customs duty has been reduced from 10 percent to nil on lentils (masur dal) originated in or exported from countries other than the US.
Also, the basic customs duty has been reduced to 20 percent from 30 percent on lentils originating in or exported from the US. Further, the Agriculture Infrastructure Development Cess (AIDC) on lentils has been reduced from the present rate of 20 percent to 10 percent.
The retail price (model) of masur dal has increased by 21 percent to Rs 85 per kg now from Rs 70 per kg on April 1, this year, as per the data maintained by the consumer affairs ministry. On Monday, the maximum selling price was as high as Rs 129 a kg at Dharwad while the minimum selling price was Rs 71 in Warangal and Rajkot.
As per the agriculture ministry data, India's domestic production of lentil, a rabi crop, increased to nearly 1.3 million tonne in 2020-21 crop year (July-June) from 1.1 million tonne in the previous year. India's total pulses production during 2020-21 crop year stood at 25.58 million tonne, which is higher by 3.64 million tonne than the last five years' average production of 21.93 million tonne.
Although India is the largest producer of pulses in the world, it imports them to meet the shortfall in the domestic market. In June, the government had imposed a stock limit on all pulses, except moong, held by whole-sellers, retailers, importers, and millers till October-end to prevent hoarding and check price rise.
However, recently, the government exempted importers of pulses from the stock limit. It also relaxed the stock limit for millers and whole-sellers. Now the stock limit is applicable only on tur, urad, moong and masoor dals till October 31. India Pulses and Grains Association (IPGA) Vice Chairman Bimal Kothari said the government should not have reduced the import duty as prices of lentils are not going to soften.
"It will not benefit any Indian stakeholders except the Canadian farmers, Canadian exporters, Australian farmers, Australian exporters and the multinational companies," he said. According to him, the price of lentils may merely reduce by Rs 1-2 and not by Rs 13-14.
"Upon this notification of the government, the Canadian and Australian exporters have already increased the price by USD 75-80 per tonne. This policy is definitely not in the interest of the Indian consumer, the Indian farmer, Indian pulse trade and not even the government," Kothari said. The association said the government should roll back the decision.
The government had introduced the AIDC on certain items, including petrol, diesel, gold and some imported agricultural products, this fiscal in a bid to boost agriculture infrastructure.