REPORT OF THE SUB-GROUP ON PRICE MONITORING AND MARKET INTERVENTION

August 2011 Pric M!"it!ri"g C ## D $%rt& "t !' C!"su& r A''%irs

1( INTRODUCTION 1(1( The sub-group on Price Monitoring and Market Intervention was carved out to study the system of price monitoring in India specifically, the existing system of daily price collection and measures to be taken to improve data collection and to strengthen the data and information base of prices of essential commodities and to review the scope for market intervention measures The composition of the sub-group is given at !nnexure I

2( PRICE MONITORING IN INDIA 2(1( In India, monitoring of prices are done on a regular basis both from absolute prices and price indices "#hart-$% C)%rt-1

& & #onventionally, market prices in India mostly refer to wholesale prices and 2

retail prices

'holesale prices refer to the prices at which transactions (etail prices are those at which

take place at the wholesale market

transactions take place at retail markets Thus, wholesale prices refer to the prices for bulk transactions between whole sellers and the retailers In other words, wholesale prices are the purchase prices paid by the retailers !s against this, retail prices refer to the prices for smaller transactions between retailers and consumers Thus, retail prices are the sale prices for retailers and purchase prices for the consumers & ) !s is evident from chart-$, a number of *overnment +epartments and agencies are involved in price collection and dissemination exercise ,owever, the purpose and scope of each agency are different from the others & ) $ Price Monitoring #ell of the +epartment of #onsumer !ffairs collects and disseminates wholesale and retail prices of selected essential food items from the view point of protecting consumer-s interests to ensure that these items remain available to the consumers and also at affordable prices
2.3.2

+irectorate of Marketing . Inspection under the +epartment of !griculture . #ooperation provides an online platform "www agmarnet nic in % for collection and dissemination of wholesale prices of agricultural commodities on a daily basis with the purpose of making the agricultural marketing more efficient by disseminating the ruling market price to the farmers as well as other market operators #ommittees "!PM#% The prices in their data feeding network are uploaded by the !gricultural Produce Market

& ) ) +irectorate of /conomics . 0tatistics "+/0% under the +epartment of !griculture . #ooperation collects wholesale and retail prices along with production, area coverage, weather forecast etc on a weekly basis to have better market intelligence and to have advance assessments regarding demand-supply gap +/0 collects prices from the 0tate 3

Marketing 1oards of the respective state governments & ) 2 'holesale Price Index is generated and disseminated by the 3ffice of the /conomic !dviser, +epartment of Industrial Policy and Promotion with the purpose of making available a headline measure of inflation which is used for macroeconomic policies and monetary policies & ) 4 #onsumer Price Indices are generated by the 5abour 1ureau with the purpose of providing #ost of 5iving Index #onsumer Price Indices are constructed separately for the Industrial 'orkers "#PI-I'%, for !gricultural 5abourers "#PI-!5%, and for (ural 5abourers "#PI-(5% & ) 6 #onsumer Price Indices for 7rban and for (ural areas are being generated separately as well as combined for urban and rural by the #entral 0tatistical 3rganisation"#03%, with the purpose of providing a general measure of inflation encompassing all sections of the population & 2 The methodologies followed for data collection by the agencies differ from each other !lso data are released and disseminated in different formats 0cope of the prices data collected by various agencies is given in Table $
T%*# 1+ N%tur !' D%t% R $!rti"g *, Di'' r "t Ag "ci s N! !' C!&&!/iti s F!r& !' P ri!/icit, C "tr sC!0 r / /%t% .u!t%ti!"s 428& 6:6 'hole sale 'eekly for Primary and 9uotations Price Index ;uel . Power< Monthly for Manufacturing and all commodities :8 $&=-$)= #PI"I'%, Monthly #PI"!5%, #PI"(5% 7rban )$= centers -$$$2 >uotations (ural-$$8$ centers &8==? )== commodities and &=== varieties #PI- 7rban #PI-(ural Monthly

D%t% S!urc 3ffice of the /conomic !dviser, +IPP 5abour 1ureau, 0himla #entral 0tatistical 3rganisation

1%g & weeks< 3ne month $ Month

$ month

+irectorate of Marketing . Inspection

'holesale prices

+aily

0ame day

D%t% S!urc +irectorate of /conomic 0tatistics +epartment of !griculture . #ooperation Price Monitoring #ell, +epartment of #onsumer !ffairs

T%*# 1+ N%tur !' D%t% R $!rti"g *, Di'' r "t Ag "ci s N! !' C!&&!/iti s F!r& !' P ri!/icit, C "tr sC!0 r / /%t% .u!t%ti!"s 8: 24 ;ood Items 'holesale . 'eekly retail prices

1%g & 'eeks

2@

&&

'holesale and retail prices

+aily

(eal time basis "0ame day%

& 4 1esides wholesale and retail<consumer prices, producers-<farm-gate prices are collected and disseminated by the +irectorate of /conomics and statistics, +epartment of !griculture . #ooperation at an interval of ) to 2 years ;arm *ate prices refer to the price of an agricultural product at the point where the commodity leaves the farm during harvesting season ;arm gate price, therefore, does not include cost of transport, delivery charges, grading and processing charges, storage charges etc & 6 Prior to every cropping season, +epartment of !griculture . #ooperation announces Minimum 0upport prices "M0P% to ensure the farmers remunerative prices for their products M0P is determined by the government on the basis of cost of production, risk under cultivation, changes in input prices, trends in the market prices, demand and supply status of the commodity, fluctuations of prices in the international markets, and a minimum provision of margin for the farmers & : In view of the fact that futures trade in agricultural commodities have gained significant momentum, spot and future prices have assumed importance

2( ACTIVITIES OF PMC DURING THE E1EVENTH FIVE 3EAR P1AN )$ The Price Monitoring #ell "PM#% in the +epartment of #onsumer !ffairs 5

was created in $@@8, with the task of monitoring prices on $2 essential commodities across $8 centers in the country It was set up as a secretariat to the #abinet 0ecretariat 3ver the span of $& years of its creation, the scope of PM# has widened and deepened )& !s of now, PM# is responsible for monitoring prices of selected essential commodities The activities of the cell includes monitoring retail and wholesale prices, and spot and future prices of selected essential commodities on a daily basis and Mandi prices on a weekly basis Prices are reported daily in the website the policy makers on a daily basis !lso, there is limited circulation of hard PM# analyses the price situation and copies of the price reports to disseminate information on price situation to give advance feedback for taking preventive measures to help policy interventions at appropriate time to prevent undesired shortfall in the availability of essential commodities *iven shortage of any specific essential commodity, and to keep prices of the item under control, PM# also undertakes commodity-specific market intervention schemes to give temporary relief to the consumers )) ! gist of the activities of the PM# during the /leventh ;ive Aear Plan "&==:-&=$&% include the followingB 2(4 Pric M!"it!ri"g absolute prices "retail and wholesale% of select essential commodities on an almost real time basis every day "(efer chart &, p 6% Price monitoring is done for && essential commodities for 2@ markets spread across the country representing Dorth, 'est, /ast, 0outh and Dorth-/astern regions of the country !ll the centres are state capitals<prominent cities of different 0tates The number of centres in a state varies depending on the geographical siCe of the state "0ee !nnexure-II for details% 9uality and variety of the item for which prices are reported remain same for a given center though these may vary from one center to another Mostly, prices 6

) 2 $ PM# is the only organiCation in the country collating and disseminating

are reported for the ;air !verage 9uality of the item for a given center
C "art 20 Flow of Dail% rices1 !E5627 6ND 8&O7E)67E !2C E)
34 centers +22 commodities, Online data feeding network 26 centers

) O5 6ND F?5?!E !2C E) NC DEX

8EE 97: /6ND2 !2CE ) +('dated e$er% Frida%,

E-mail 8 centers

Fax 15 centers

E -mail 8 commodities@ ) 'ot > F(t(re rices Newswire 18 E -mail

Data entered #% t"e /C staff

2- commodities

rices stored in t"e N2Cser$er of t"e De'artment of Cons(mer 6ffairs rices +1-.8 entries, c"ecked and $erified at /C !etail > 8"olesale rices !e'ort along wit" $ariations are *enerated in N2C) er$er< )'ot > F(t(re rice !e'ort *enerated in t"e /C

2ntegrated Dail% rice !e'ort *enerated #% t"e /C

&ard Co'ies circ(lated e$er% Frida% to ) elect Central *o$ernment De'artments +limited circ(lation e$er%da%,

rices !eleased on t"e we#site e$er%da%

rices e-mailed e$er% da% to t"e )tate Ci$il )(''lies De'artments and to $ario(s De'artments of t"e *o$ernment of 2ndia

"tt'0; ; fcainfowe#<nic<in; rices=6''lication; dail%='rices; san=interface=dail%<as'

Note:*Status as of July 2011

) 2 & (etail and wholesale prices are received from the 0tate #ivil 0upplies +epartments of the respective state governments either online or by fax !s of now, prices for &6 centers are being received online 8 centers are 7

sending prices by e-mail and the remaining $4 centers are sending daily prices by fax"!nnexure-III% ) 2 ) Prices are received by ) to 2 pm daily PM# compiles this data and releases the +aily Price report the same day by 4 pm The gap between obtaining price report from the states, feeding them into the system and then releasing the daily report containing $=:8 entries is less than two hours ) 2 2 The number of commodities for which prices are monitored has been progressively increased from $2 "in &==6% to $: "in &==8% to &$ "in &=$=% and further to && "in &=$$% "as shown in chart ) below% The commodities currently monitored are (ice, 'heat, !tta, *ram +al, Tur +al, Masoor +al, Moong +al, 7rad +al, *roundnut 3il, Mustard 3il, Eanaspati, 0oya 3il, 0unflower 3il, Palm 3il, 0ugar, Tea, 0alt, Potato, 3nion, *ur, Milk and Tomato CHART 2

14 C!&&!/iti s &!"it!r / u$t! 2005 %r + Rice, Wheat, Atta, Gram Dal, Tur Dal, Groundnut Oil, Mustard Oil, Vanaspati, Sugar, Tea, Salt, Potato, Onion, Milk, 3 commodities added in 2008 are: Masoor Dal, Moong Dal, Urad Dal, 4 commodities added in 2010: So a Oil, Sun!lo"er Oil, Palm Oil, Gur 1 commodity added in 2011: Tomato # Status as on $ul %&''

) 2 4 0imultaneously, the centres from where the prices are obtained have also increased in numberF they have almost trebled as shown in chart 2

CHART 4

# Status as on $ul %&''

) 2 6 'holesale prices were hitherto reported for ): centres on a weekly basisF now they are being reported on a daily basis for 2@ centresF these are the same centres for which retail prices are reported ) 2 : Prices are collected and reported by the +epartment of #ivil 0upplies in the 0tates on daily basis for the retail and wholesale prices !ll centres do not necessarily report prices for all commodities "as demand for some commodities is region specific% ) 2 8 0pot and future prices of 8 essential commodities are collected from Dational #ommodity /xchage "D#+/G% by e-mail and are monitored daily ) 2 @ 0ince &==@, Mandi prices of &= essential commodities are collected from Dewswire by e-mail and are monitored on a weekly basis

2(6

Pr!/ucti!" %"/ Diss &i"%ti!" !' Pric R $!rts

) 4 $ +aily Price (eport consists of the followingB )4$$ (etail and wholesale prices of the selected && essential commodities in +elhi and variations of these prices compared to one week back, one month back, three months back, six months back, one year back, and two years back )4$& +aily retail and wholesale prices of the same && commodities for all 2@ 9

centers )4$) Eariation in retail prices for each commodity over a period of last two weeks )4$2 0pot and future prices of selected 8 essential food items<agricultural commodities which are traded in the Dational #ommodity /xchange )4$4 #omparative Mandi and retail prices of &= essential commodities and their variations over last one week, one month, three months, six months, and one year as reported by the D#+/G

) 4 & 'eekly report of wholesale price indices is prepared separately based on the 'PI released by the 3ffice of the /conomic !dviser, +IPP, Ministry of #ommerce . Industry

2(7

Pric A"%#,sis %"/ P!#ic, I"t r0 "ti!"

) 6 $ The prevailing price situation, as well as factors which impact on prices, in both domestic and international markets, are studied and brought to the notice of high level committees, such as #ommittee of 0ecretaries "#30%, #abinet #ommittee on Prices "##P%, through agenda notes prepared for their meetings, for appropriate action at the policy level This note reviews the followingB o Inflation based on #onsumer Price Index o !rea and Production of maHor food crops o Price scenario of /ssential #ommodities o +omestic 0pot and ;utures Prices of /ssential #ommodities o International ;utures Prices o 'orld Markets and Trade scenario of foodgrains o #ommodity-wise details for wheat, rice, sugar, pulses, edible oils, vegetables and milk containing !rea and Production scenario, 10

Procurement scenario, domestic and international prices, and 'orld Markets and Trade 0cenario for the specific commodity

) 6 & These reviews and analyses are based on the data collected from various sources ) 6 ) The decisions taken at the #abinet #ommittee on Prices "##P%< #ommittee of 0ecretaries "#30% meetings are conveyed to the Ministries <departments concerned to take appropriate action decisions taken in these meetings are implemented by The the

Ministry<+epartment concerned which is charged with the responsibility of the subHect matter of the decision +epartment of #onsumer !ffairs "PM#% monitors the action taken on those decisions by the concerned Ministries<departments and submits the action taken report before the #abinet<##P<#30 ) 6 2 3f late, work have been initiated to analyse commodities price volatilities in India at the instance of *-&= 0tudy *roup on #ommodities Price Eolatilities

2(5

M%r8 t I"t r0 "ti!" Acti0iti s

) : $ (egular retail price reviews have been instrumental in deciding on strategies for market intervention to stabiliCe the market and ensure that shortages do not adversely affect the consumers, particularly the vulnerable section of the population In this context, market intervention activities undertaken for pulses and certain vegetables like onion deserve special mention 0uch Market Intervention 0chemes are introduced as and when directed by the /*3M "/xpert *roup of Ministers% 2(5(2 M%r8 t I"t r0 "ti!" '!r Pu#s s In the context of rising prices due to the increasing gap between supply and demand for pulses, two schemes were introduced to improve their domestic availability 11

"a% 0cheme for market intervention under which reimbursement of losses upto $4I of landed cost and service charge of $ &I of #I; value is allowed to the designated import agencies "P07s<#ooperatives% for import of pulses, since &==6-=: This scheme has been discontinued after )$ ) &=$$ "b% 0cheme for distribution of imported pulses by designated import agencies "P07s<#ooperatives% at subsidiCed rates by 0tate *overnments, at the rate of (s $= per kg, since &==8-=@ #urrently, this scheme is being implemented under which five designated agencies "viC , MMT# 5td , 0T# 5td , P/# 5td , D!;/+ and D##;%, import pulses and supply to the 0tates<7Ts for distribution in the Public +istribution 0ystem The designated importing agencies have played a dominant role in bridging the gap between demand and supply of pulses in the domestic market 2(5(2 M%r8 t I"t r0 "ti!" '!r O"i!" The crop failure of 3nion during the kharif and late kharif season in &=$= caused a huge spike in the onion prices across the country, the retail and wholesale prices which were already moving northwards suddenly shot up in the third week of +ecember &=$= In some centres, it went up by more than $==I The price movement was more or less same in the maHor mandis of onion producing areas !long with other trade measures the *overnment also decided to encourage import of onions to soften the prices in domestic markets Public 0ector undertakings such as P/#, and 0T# were instructed to import onions for domestic consumption ! scheme evolved under which D!;/+ and D##; were instructed by the *overnment to undertake the retail sale of onion through their respective outlets at the prices below the prevailing market prices The reimbursement of losses to D!;/+ and D##; for Market intervention was allowed for January &=$$ with authoriCation to sell 6=== tonnes of onion and reimbursement being capped at )=I of 12

the landed cost including statutory duties at both ends and loading<unloading charges, at +elhi<other urban centres This step played an important role in making the onion available to the common man at a reasonable pries and stabiliCing the prices of onion in the open market

4( CHA11ENGES AHEAD FOR PRICE MONITORING CE11 4(1( C)%## "g s i" Pric M!"it!ri"g 2 $ $ Price collection mechanism needs to be reviewed in the context of persistent food inflation It is necessary to revalidate the representativeness of the centers keeping in view the production and consumption pattern of specific items in a given center, assigning appropriate weight to each center based on average transaction per day in the specific center for a specific commodity In the process, more centers which are representative centers for specific commodities may have to be added whereas less representative centers in the existing list may have to be dropped 2 $ & There is a need to improve the efficiency of data collection mechanism /fforts are re>uired to be made to make the data collection cent-per-cent online and to ensure maximum compliance of data entry from the selected centres in respect of the listed commodities 2 $ ) ! system of automatic check and validation needs to be put in place for on-the-spot and immediate authentication and validation of the reported prices 2 $ 2 It is necessary to working with the state civil supplies departments to ensure adoption of a uniform methodology for collection and reporting of data across the selected centres 2 $ 4 Though it has been found in the past that wholesale and retail prices collected and reported by the PM# compares favourably with the prices and indices collected and generated by the other agencies 13

mentioned earlier, it is important to keep up this comparison on a regular basis with a time gap of ) months or so especially with the #onsumer Price Index being generated by the #03 to ensure the representativeness and convergence of the prices generated 2 $ 6 +epartment of #onsumer !ffairs being the administrator of the regulator "i e , ;M#% of the ;orward Markets in India, it may be necessary to monitor spot and future market prices more rigorously to understand the implications of future prices on wholesale and retail prices on the one hand and to be able to provide advance feedback for policy decisions regarding permitting or banning forward trading for a specific commodity

4(2( C)%## "g s i" Pric R $!rti"g 2 & $ !s of now, data feeding network and data base of prices are maintained by the DI# cell of the +epartment of #onsumer !ffairs under the direction and supervision of the Price Monitoring #ell !lso, the daily price report is generated in the DI# server There is a need to test and improve the system of generating user friendly price reports and providing a platform for easy data mining 2 & & Though center-wise prices are reported, all India average price for a specific commodity reported now is the simple average of prices in centers which reported the price of a specific commodity on a specific day #alculating a more representative average all India price will have to be done by taking into account volume of transactions or market arrivals of the given commodity in a given center on a specific day as weights, and calculating weighted average of prices 2 & ) Price reports need to be visually more attractive and revealing to help diagnosing variations and trends with ease and on an immediate look

4(2( C)%## "g s i" Pric A"%#,sis %"/ P!#ic, I"t r0 "ti!"s 14

2 ) $ PM# needs to engage in appropriate research studies<surveys to improve data<information collection and get feedback on policy interventions 2 ) & It has been noted in the past that wholesale and retail prices do not necessarily move in tandem In fact, many a times, though it is observed that wholesale price either declined or remained stable, retail prices still increased, implying that the benefit of reduction in wholesale prices is not passed on to the consumers in retail prices !lternatively, many a times wholesale prices increase but retail prices do not increase immediately, either due to communication gap between wholesale and retail markets that involve some time lag, or the retailers bear the burden of increased prices for not loosing the customer especially if the nature of the commodity is highly ealastic This needs to be constantly monitored by analysing the trend in the magnitude of gap between the retail and wholesale prices and analysing the causes of such gap to identify the direct and indirect measures that could be used for market interventions 2 ) ) There is an urgent need to understand the nature of demand for specific commodities to be able to distinguish between change in demand due to change in prices and shift in demand due to change in income and life-style and to diagnose the interaction effects of the two 2 ) 2 #ommodity specific analysis needs to be undertaken to study the supply side factors and to analyse their impact on prices of essential commodities 2 ) 4 ;actors affecting price movements may be different at the regional, national and global levels at any given point and period of time It is necessary to constantly keep a track of the international prices and the factors affecting their movements to be able to diagnose in advance the probable impact of international factors on domestic prices and supply of commodities

15

4(4( C)%## "g s i" M%r8 t I"t r0 "ti!" Acti0iti s 2 2 $ 3fficers and staff of the PM# specialise in /conomics and statistics 1ased on the experiences of operating two pulses subsidy schemes, it was evident that the administrative and accounting aspects associated with the subsidy reimbursements resulting from market intervention activities like pulses schemes do not fall under the purview of the expertise of PM# 2 2 & Though market interventions are the outcome of price monitoring, operation of market intervention schemes is entirely a different activity *iven the present structure and staff of the PM#, market intervention activities may either have to be shifted from PM# to any other appropriate section of the +epartment or specialised personnel may need to be posted in the cell 2 2 ) !nalysing the impact of specific market intervention activity before undertaking another such activity must be a pre-re>uisite

6( STRATEG3 FOR THE T9E1FTH P1AN

6(1( C!"0 rti"g PMC i"t! Ess "ti%# C!&&!/iti s M!"it!ri"g Di0isi!" 4 $ $ The 0tanding #ommittee of this +epartment as well as the /stimates #ommittee on K+rought Management, ;ood grains Production and Price 0ituation- recommended that the role of the PM# should be redefined in view of the dynamic nature of the domestic and global markets The task to set up a Kcredible data collection and monitoring system- re>uires multi-tasking at different levels There is, therefore, an urgent need to strengthen the Price Monitoring #ell In this context, a proposal to convert the PM# to a full-fledged division, an /ssential #ommodities Monitoring +ivision "/#M+%, was sent to +epartment of /xpenditure in &=$= for approval 4 $ & 0trengthening of PM# re>uires the followingB 16

5.1.2.1.

C%$%cit, *ui#/i"g !' t)

:isti"g &%"$!; r < !nalyCing

the trend of prices and availability of essential commodities re>uires constant updating of the knowledge base and skills of the officials engaged in this work 3fficials of PM# will be deployed to national as well as international training programmes organiCed on price related subHects and to the specialised trainings related to data analysis and econometrics by national<international organisations<7niversities etc #apacity building in terms of office procedure is also re>uired for the staff 4$&& A//iti!"%# &%"$!; r- To ensure the >uality, reliability and

regularity of the data, PM# needs to be strengthened by the deployment of additional manpower Two Joint +irector<+irector level posts have already been created in the +epartment by the Indian /conomic 0ervice #adre 3ne of the two officers has *iven the nature of already assumed charges recently

administrative and accounting work, one under 0ecretary level post and one 0ection 3fficer level post is urgently re>uired Personal !ssistants and !ssistants cum +ata /ntry 3perators will also be re>uired to achieve this task Market Intervention 0chemes re>uire designated officers and staff for regular monitoring of the domestic availability of pulses and onionsF constant liaising with representatives of P07s<#ooperatives for information on status of imports and supply of imports of pulses to 0tate *overnments In addition, it would be advisable to post an accounts officer at the 0T0 level for checking all records<documentation on receipt of claims for reimbursement of losses for onward submission to the Internal ;inance +ivision "I;+% In the case of the P+0 scheme of pulses, the reimbursement claims of P07s, complete in all respects, have to be settled within one month of submission

6(2( Str "gt) "i"g !' Pric C!## cti!" M c)%"is& %"/ Pric R $!rti"g 4 & $ !n /xpert #ommittee may be constituted to review the existing 17

price collection mechanism and to advise on improvement 4&& ;or improving efficiency of data collection, cent-per-cent online ;or this appropriate financial

system needs to be put in place

assistance will have to be provided to purchase computers and wherewithals to the centers who are lacking in computer facilities 4 & ) Trainings, workshops and follow up meetings are re>uired to be organised with the state civil supplies departments to ensure adoption of a uniform methodology for collection and reporting of data across the selected centres 4 & 2 3fficials involved with the price monitoring and analysis work will have to make occasional field visits to have interaction with the state level officials involved in the work and to visit the markets to develop better understanding of the market dynamics on the one hand, and to get feedback from consumers, on the other 4 & 4 ! computerised system will have to be developed to instantly check and validate the reported prices 4 & 6 To monitor and analyse the impact of forward trading on market prices, officials associated with PM# will have to be trained on the subHect

6(2( Str "gt) "i"g !' Pric R $!rts Structur 4 ) $ /xternal IT experts will be engaged in improving the presentations of the price reports 6(4( Str "gt) "i"g !' Pric A"%#,sis 4 2 $ Su*scri*i"g t! t) S r0ic s !' Pr!' ssi!"%# Org%"is%ti!"s - To undertake the research work related to availability and trend of prices of essential commodities, subscription to the services of organisations such as Dewswire $8, !griwatch, Indiastat and<or 18

similar services is essential

;or instance, Indiastat provides time

series data on various parameters of the Indian as well as global economy, while Dewswire $8 and !griwatch provide valuable insights into the national and international commodity markets 4 2 & Hiri"g Pr!' ssi!"%#s =D!&%i" challenges of commodity analysis :$ rts> - To handle the >ualified personnel with PM# in its present

appropriate knowledge and skills are re>uired

status is not endowed with ade>uate manpower resources with re>uired skills Thus, hiring a range of professionals like !gricultural /conomists, 0tatisticians and /conometricians will help in analysis and comprehension of data to provide concrete and precise inputs in policy formulation 4 2 ) E"g%gi"g $ri0%t !rg%"is%ti!"s '!r c!"/ucti"g r s %rc)

stu/i s %"/ sur0 ,s- There are rough estimations regarding the consumer base in India 1ut there has not been a data base on the profile of consumers in India D003 conducts #onsumer /xpenditure 0urvey that gives the consumption pattern but not the structure and characteristics of consumers It is important to take up field surveys to generate primary data regarding the consumer base in India !lso there is complete absence of data relating to the aggregate demand of specific essential commodities These surveys need to be planned, designed and executed in a systematic and professional manner( This task may be outsourced to the professional organisations that are well versed in this field

6(6( Str "gt) "i"g M%r8 t I"t r0 "ti!" Su$$!rt M %sur s 6(6(1( E:isti"g M %sur s 44$$ !s stated under para ) :, PM# is involved in market intervention activities, whereby central agencies are engaged for carrying out the task, such as in the case of imports and disposal of pulses, and onions etc The aim of such interventions is to increase availability of essential commodities The obHective of 19

involving #entral agencies is to take advantage of their trade operations and incentivise them to procuring and selling essential commodities in the domestic market within their commercial ambit This is expected to cool market sentiments 44$& The role of the #ivil 0upplies #orporations and #ooperatives in providing essential commodities at reasonable rates is also crucial ! scheme for strengthening capacity of 0tate #ivil 0upplies #orporations<#onsumers Marketing ;ederations for effective market intervention in essential commodities is operated by +epartment of ;ood and Public +istribution "+;P+% #ooperatives such as the Dational #ooperative #onsumers;ederation of India 5td "D##;% and Dational !gricultural #ooperative Marketing ;ederation of India 5td "D!;/+% can also be strengthened to achieve these obHectives 44$) 0tate governments, being closer to the market, have also to take proactive measures In a market driven economy, 0tate *overnments can better influence the prices of essential commodities by intervening in the market by selling these essential commodities at specific retail outlets at prices below the prevailing market prices This has been done by some state governments, for instance, Maharashtra, *oa and +elhi 44$2 'hen prices are rising, it is essential that action is swift and efficient ! special fund may be created for meeting emergencies such as when prices of essential commodities spike re>uiring urgent action at market stabiliCation #reation of a Price 0tabilisation ;und in line with the recommendation of the 'orking *roup on #onsumer !ffairs headed by the #hief Minister of *uHarat ",on 0hri Darendra Modi% to undertake market interventions and to improve domestic supply of essential commodities could be considered 44$4 #old storage facilities are inescapable for storage of perishable items #reation of efficient storage infrastructure would go a long way in purchasing such items from the 20

farmers<producers and releasing them gradually into the market to bridge supply demand mismatches 44$6 D##; and D!;/+ will have to be strengthened to achieve the obHectives of effective market intervention by providing essential commodities at reasonable rates 44$: Provision of mobile vans to D!;/+ and D##; from the #onsumer 'elfare ;und may be explored for supporting D!;/+ and D##; in market intervention activities In the aftermath of the recent onion crisis, D!;/+ was provided mobile vans from the #onsumer 'elfare ;und which were effectively used in swiftly stabilising onion prices 6(7( Str "gt) "i"g !' Pric M!"it!ri"g C ## i" t) St%t s Prices are collected and reported by the respective 0tate #ivil 0upplies +epartments on daily basis 9uality and authenticity of data largely depend on the efficiency of the Price Monitoring #ells in the 0tate *overnments 0trengthening the 0tate Price Monitoring #ells along with the PM# in #onsumer !ffairs will address the issues in holistic manner The 0tate PM#s is proposed to be strengthened in the following waysBa 1y employing trained manpower in the collection and tabulation of the data at the 0tate 5evel ! suitable data entry operator "+/3% can be selected by the state governments under #entre-s payroll b 1y organiCing regular workshops at the (egional and Dational 5evel to get the feedback from field workers and discuss the practical problems being faced in the collection and reporting of prices c 1y providing IT infrastructure such as #omputers, Printers, and 7P0 etc to enable the 0tate PM#s for online reporting of prices d 1y increasing the sample siCe in order to obtain representative sets of price data 'ith a designated +/3 at each #entre, 0tates will be induced to progressively increase the number of centres from 2@ "existing% to $== by the end of Twelfth ;ive Aear Plan This will enhance the robustness of the data 21

6(5( Str "gt) "i"g N%ti!"%# I"'!r&%tics C "tr =NIC> i" t) D $%rt& "t 4 : $ +ata center servers and system software would be re>uired to upgrade the online system of PM# It is proposed to engage services of 0olution architect and +evelopers for a period of around six months to prepare +ata 'are ,ousing and !nalysis application and to bring in 1usiness Intelligence into the whole system ! data warehouse is planned with the huge volume of data presently being generated to facilitate the generation of analytical reports 4 : & To support the day to day operations and to meet additional reports<>uery re>uirements, modifications in the software, it is proposed to hire services of at least one Programmer for the full plan period 7( R ?uir & "t !' 'u"/s '!r t) T; #'t) P#%" P ri!/( 0trengthening of Price Monitoring #ell at the centre will re>uire around (s 826 5akhs for the entire twelfth plan period "&=$&-$:% !n amount of (s 6$ =4 lakhs will be re>uired for strengthening of Dational Informatics #entre " DI#% The task of strengthening of Price monitoring #ells at states will re>uire an amount of (s $&4: lakhs The overall re>uirement of funds for the entire plan period will be around (s &$62 lakhs 0cheme wise year wise details are given in !nnexure IE 5( R c!&& "/%ti!"s !' t) su*-gr!u$B *iven the utility of the price data and the uni>ue position of the PM#, three broad sets of recommendation are made a To achieve and maintain the >uality and robustness of daily price data, the "i% #onstitution of an /xpert #ommittee to (eview the Price #ollection mechanism and to suggest strengthening of the existing system "ii% 0trengthening Price Monitoring #ell at the #entre, 22

following are suggestedB

"iii% 0trengthening Price Monitoring #ells at the 0tates, and "iv% 0trengthening Dational Informatics #entre at the #entre b To achieve the obHectives of effective market intervention it is necessary to

strengthen the D##; and D!;/+ through the creation of cold storage infrastructure and market stabilisation fund

LLLLLLLLLLLLLLLLLLLLLL

23

A"" :ur -I

#3MP30ITI3D 3; T,/ 071-*(37P 3D P(I#/ M3DIT3(ID* !D+ M!(M/T IDT/(E/DTI3D #onvener0enior /conomic !dviser, +epartment of #onsumer !ffairs

Members - Manager +irector, D##; /conomic !dviser, +epartment of #onsumer !ffairs (epresentative of *ovt of Tamilnadu (epresentative of *ovt of *uHarat (epresentative of *ovt of !ndhra Pradesh (epresentative of *ovt 3rissa (epresentative of *ovt of D#T of +elhi (epresentative of #ompetition #ommission of India (epresentative of Dational #ouncil of !pplied /conomic (esearch (epresentative of #entral 0tatistical 3rganiCation (epresentative of Dational #ommodity /xchange "D#+/G% (epresentative of Dational Informatics #entre "DI#% +irector "#ooperation%, +epartment of #onsumer !ffairs

24

A"" :ur -II 3EAR-9ISE CENTERS@

S(N!( NORTH AONE $ +/5,I & 0,IM5! ) 57#MD3' C "t rs 'r!& ;)ic) $ric s ; r c!## ct / i" 2006 S(N!( $ & ) 2 4 6 C "t rs %// / i" 2007 #handigarh 0hrinagar Jammu !mritsar 5udhiana +ehradun S(N!( $ & ) 2 4 6 : 8 @ $= $$ $& $) $2 $4 $6 $: $8 C "t rs %// / i" 2010 ,I0!( M!(D!5 M!D+I 1,!TID+! M!DP7( E!(!D!0I !*(! J3+,P7( M3T! D!*P7( ID+3(/ (!JM3T 1,!*!5P7( #7TT!#M 0!M1!5P7( 0I5I*7(I IT!D!*!( +IM!P7( $ M3,IM! S(N!( C "t r / # t / i" 2011

9EST AONE 2 4 6 : EAST AONE 8 @ $=

!,M/+!1!+ 1,3P!5 M7M1!I J!IP7(

(aipur

P!TD! 1,71!D/0,'!( M35M!T!

(anchi

NORTH-EAST AONE $$ *7'!,!TI $& 0,I553D* $) !IN'!5 $2 !*!(T!5! SOUTH AONE $4 $6 $: $8

M3,IM!

,A+/(!1!+ 1!D*53(/ T P7(!M #,/DD!I 25 C "t rs

$@ &= &$ && &)

1B C "t rs # Status as on $ul %&''

EiHaywada +,!('!+ /(D!M75!M +ID+I*75 T,I(7#,I(!P!55I 60 C "t rs

4C C "t rs

25

A"" :ur -III CENTRE-9ISE DATA REPORTING S3STEM @ O"#i" D%t% R $!rt / R $!rt / 0 Do F /i"g 0 Do *, -M%i# 0 Do *, F%: NORTH AONE $ +elhi $ #handigarh $ ,isar & 0himla & 0hrinagar & Marnal ) Mandi ) Jammu 2 5ucknow 2 !mritsar 4 Manpur 4 5udhiana 6 Earanasi 6 1hatinda : !gra : +ehradun 9EST AONE 8 (aipur ) Jaipur 8 Jodhpur @ !hmedabad @ Mota $= (aHkot $$ 1hopal $& Indore $) Mumbai $2 Dagpur EAST AONE $4 Patna $= (anchi $6 1hagalpur $$ Molkata $: 1hubaneshwar $& 0iliguri $8 #uttack $@ 0ambalpur NORTH-EAST AONE 2 *uwahati $) Itanagar 4 0hillong $2 !iCwal 6 !gartala $4 +eemapur SOUTH AONE &= ,yderabad : 1anglore &$ EiHaywada 8 +harwad && Thiruvanthapuram &) #hennai &2 +indigul &4 Thiruchirapalli &6 /rnakulam # Status as on $ul %&''

26

A"" :ur IV 3 %r ;is r ?uir & "t !' 'u"/s '!r str "gt) "i"g Pric M!"it!ri"g C ## =i" Rs( #%8) %( Pur$!s '!r ;)ic) 'u"/s %r R ?uir /
C!"stituti!" %"/ S r0ici"g !' %" E:$ rt C!&&itt C!"0 rti"g PMC i"t! ECMD Org%"iDi"g Tr%i"i"g Pr!gr%&& s '!r t) O''ici%#s !' PMC Su*scri*i"g t! t) S r0ic s !' Pr!' ssi!"%# Org%"is%ti!"s Hiri"g Pr!' ssi!"%#s =D!&%i" :$ rts> E"g%gi"g $ri0%t !rg%"is%ti!"s '!r c!"/ucti"g r s %rc) stu/i s %"/ sur0 ,s

Str "gt) "i"g !' PMC %"/ Pric M!"it!ri"g M c)%"is& %t C "tr 2012-12 2012-14 2014-16 2016-17 2017-15 P ri!/ 2012-15

&= 2= &4 &=

&& 22 &6 &4 &&

&2 68 &8 88 &2

&: $4 )= )& &6

&@ 8: )$ 82 &8

124(64 142(2C 120

)= 4=

)) 4& 4=

)6 )= 44 $)

)@ @) 4: 8@

2) @& 6= :8

1B2(16 257(20

T!t%# *( 0trengthening Dational Informatics #entre "DI#% c( /mploying Trained Manpower at state 3rganiCing 'orkshops IT Infrastructure to #entres T!t%# GRAND TOTA1 ==%E*Ec>

146(4

167(1C

17B(CC

1B1(2C

1C4(41

B47(2B

Str "gt) "i"g !' NIC 10 11 12(1 12(21 14(74 71(06

Str "gt) "i"g !' PMCs i" St%t s $&= $= &= 160 206(4 $48 $$ &4 1C4 271(1C &=$ 6= $& $ )$ &4 244(C6 427(04 &2@ 6 $) )$ )@ =6 201(C5 4C7(65 )=& 2 $2 62 28 8) 276(B5 654(C2 1021(7 71(06 174(14 1267(5C 2174(12

27

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