Govt reduces import duty on masur dal to zero, cuts agri cess by half as prices & demand rise 

The move comes ahead of the festive season when demand is expected to rise even as inflation has already driven prices up.

File photo of lentils on sale at a market | Joegoauk Goa | Flickr
File photo of lentils on sale at a market | Joegoauk Goa | Flickr

New Delhi: The central government Monday reduced the import duty on masur dal while also cutting down the Agriculture Infrastructure Development Cess (AIDC) on the commodity. While the import duty on masur has been slashed to zero per cent, the AIDC on the lentil has been cut down by half, to 10 per cent from 20.

According to a statement issued by the Ministry of Finance on Twitter, a notification in this regard was tabled in Rajya Sabha by Finance Minister Nirmala Sitharaman. It further stated that the basic customs duty was reduced to zero from 10 per cent on masur originating in or exported from countries other than the USA.

The decision to slash the overall taxation on masur imports is being seen as the government’s effort to increase availability of the commodity ahead of the upcoming festival months that will see demand rise.

The decision is also expected to balance the demand-supply outlook, especially since there is already a sustained inflation in prices of pulses across the country, which forced the government to impose a stock limit and remove pulses from the free foodgrains scheme setup as pandemic relief.

ThePrint had reported that an erratic monsoon, coupled with a deficient rainfall, has hit pulses and crop sowing in top producing states, which could further raise prices and add to the inflation.

The government had introduced AIDC earlier this year while introducing the Union budget 2021-22. It is levied on certain items — including petrol, diesel, gold and some imported agricultural products — which are used to boost agriculture infrastructure.

Also read: Why Modi govt’s prized food scheme went from ‘dal of choice’ to no dal at all

Drop in masur production

The import of masur was necessary since retail prices of the commodity had already increased against last year by more than 30 per cent, data from the consumer affairs department shows.

While retail prices increased from Rs70/kg to Rs110/kg between July 2020 and July 2021, the wholesale price of the commodity increased from Rs55/kg to Rs80/kg in the same period.

This is especially worrying given the fact that there has been a decreasing trend in domestic production of masur in the country. According to the Third Advance Estimates of Production of Foodgrains for 2020-21 from the Ministry of Agriculture, the lentil production in the country dropped from 16.2 Lakh Metric Tonnes (LMT) in 2017-18 to 11 LMT in 2019-20.

(Edited by Manasa Mohan)

Also read: Dal farmers & traders fear big losses, dip in production after Modi govt allows free imports