“Government Initiates Sale of Discounted Onions Amid Soaring Prices”


The Indian government has launched an initiative to sell onions at a reduced price of ₹25 per kg in response to rising onion costs due to lower supplies caused by delayed harvests of the summer crop. Retail prices have more than doubled in some cities, prompting the government’s intervention to stabilize costs.

Indian Government Initiates Sale of Subsidized Onions to Counter Soaring Prices
Indian Government Initiates Sale of Subsidized Onions to Counter Soaring Prices

India is grappling with surging onion prices once again as lower supplies, resulting from delayed harvests of the summer crop, have driven up the cost of this commonly consumed vegetable. To address this issue, the Union government has taken the initiative to sell onions to consumers at a subsidized rate of ₹25 per kg in over a dozen cities. This move aims to make onions more affordable and mitigate the recent price surge.

The government’s intervention comes in response to a sharp increase in retail onion prices, which have risen to ₹70-80 per kg in some cities, more than double the prices observed a couple of weeks ago when they were at ₹30 per kg. Onions are a staple ingredient in Indian dishes, and urban consumers are particularly sensitive to fluctuations in onion prices.

State-backed food agencies have launched operations to distribute subsidized onions from the Ministry of Consumer Affairs’ reserves of 500,000 tonnes in several cities, including Delhi, Jaipur, Bikaner, Kota, Chandigarh, Jalandhar, Bhopal, Raipur, and Hyderabad.

The government’s intervention has already had a positive impact on moderating prices in certain consumption centers, according to official data. An official commented, “Prices have started to come down and will come down further due to the imposition of minimum export prices and the sale of affordable onions by the government.”

Controlling food inflation remains a priority for the Modi government, especially as the ruling Bharatiya Janata Party (BJP) faces elections in five states later this month and the general elections in 2024.

Despite the volatility of onion prices, the government maintains significant reserves of nearly 500,000 tonnes, with 170,000 kgs being sold at subsidized rates during a previous price spike in August. This strategic reserve allows the government to intervene in the market when onion supplies dwindle, effectively stabilizing prices.

India annually produces approximately 30 million tonnes of onions, while the demand for consumption stands at 16 million tonnes. The current price surge is a result of adverse weather conditions and a deficient monsoon that damaged crops in major producer states like Maharashtra and Karnataka.

To address this challenge, state-backed food agencies such as the National Cooperative Consumers’ Federation (NCCF) and the National Agricultural Cooperative Marketing Federation of India (NAFED) have been working to manage onion stock disposal in significant consumption centers.

Sources By Agencies

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