7.24 ndian onom
Reforms Projects (WBAERPs). At present, efforts Regular review meeting on price and
are being made to develop service price indices availability situation at the highest level.
for selected services initially on an experimental States took strict action against hoarding
basis (covering road transport, railways, airways, and black marketing (as advised by the
business, trade, port, postal telecommunications, Government).
banking and insurance services only). Higher MSP (minimum support
The basic studies of index construction are prices) were announced to incentivize
complete. Before formal launching of the index, production and enhance availability of
the complete study is supposed to be discussed
with academicians, practitioners and the users Price Stabilization Fund (PSF)
scheme is being implemented to
of the services. The need to construct a service
control price volatility of a g r i c u l t u r a l
price index for the economy was felt more
commodities like pulses, onions, etc.
after the OECD-Eurosat Report of 2005 on the
Aimed at effective market intervention
the buffer stock of pulses was enhanced to
2 million tonnes (from 1.5 lakh
goVernment steps to check million tonnes).
InflatIon Minimum export price imposed on edible
oils (US $900 per tonne). To incentivize
The typical socio-economic composition of
domestic production this restriction has
the consumer groups in India makes consumer
been removed on oil (except for palm oil,
inflation a highly sensitive issue. This is why mustard oil and sunflower oil).
controlling inflation at consumer level has been
Stock holding limits put on sugar till April,
an area of priority, for the Government. The major 2018 together with imposing 20 per cent
steps74 taken by the Government in this regard in duty on its export and allowed raw
the year 2017-18 are as briefed below: sugar import at zero custom duty (5 lakh
73. ‘The number of National Statistical Agencies collecting
service producer prices data, though growing, is still Onion put under minimum export price
small , points out the OECD-Eurosat, 2005 Inquiry (of US $850 per tonne) till December
on National Collection of Services Producer Prices
2017. States were advised to put
Preliminary Report, giving information on 45 such
countries. The report further adds that while some stock limit on it and inform the Centre
such agencies have focused exclusively on the price of about their future needs (so that import
services provided to enterprises, others have approached can be done in time).
the subject more broadly through the development of
services producer price indices with varying approaches The impact of these measures has been quite
and coverage. As per the report, at present, 30 countries positive. The headline inflation (CPI-C) declined
collect services producer prices while preliminary to 3.3 per cent during 2017-18 (upto December,
works have started in other countries, particularly the
European countries under the auspices of the Eurosat.
2017) with broad based decline in inflation across
Other than the developed Euro-American economies major commodity groups (except Housing and,
some other countries which worked as inspiration for Fuel and Light). The index has been below 4 per
India which have such an index are China, Hong Kong, cent for 12 straight months, from November,
Czech Republic, Slovak Republic, Poland, Lithuania,
Israel and Vietnam. 2016 to October, 2017 and consumer food price
74. Economic Survey 2017-18, Vol. 2, p. 67, Ministry of index (CFPI) averaged around 1 per cent during
Finance, GoI, N. Delhi. the year (upto December 2017).