The Indian government signalled yesterday it would take steps to limit profiteering by middle-men in the fresh produce supply chain, to ease soaring food inflation in the country.
Finance minister Pranab Mukherjee has asked states to remove local levies such as octroi and mandi taxes, and promote more efficient distribution and marketing infrastructure, reported Indian newspaper the Business Standard.
'I would urge you to review all local levies like mandi tax and octroi duty which add to prices of food articles and impede smooth movement of essential commodities,' Mr Mukherjee said in an address to state finance ministers.
'There is a need for you to urgently look into supply management of items that are driving the current round of food inflation, in particular local factors that are widening the gap between wholesale and retail prices,' he told the ministers.
He added that bottle necks in the supply chain, and food spoilage also needed to be addressed.
The state-government-regulated markets also prevented retailers from dealing directly with farmers, he added, which meant there was no incentive for private investment in the agricultural sector.
Farmers and consumers both lost out in the current system, said Mr Mukherjee.
In December of last year food inflation reached as high as 18.3 per cent, due largely to an increase in the cost of vegetables.
