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REPORT
OF
THE SUB-GROUP
ON
PRICE MONITORING AND MARKET INTERVENTION
August 2011
Pric M!"it!ri"g C##D$%rt&"t !' C!"su&r A''%irs
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1( INTRODUCTION
1(1( The sub-group on Price Monitoring and Market Intervention was carved
out to study the system of price monitoring in India specifically, the
existing system of daily price collection and measures to be taken to
improve data collection and to strengthen the data and information base of
prices of essential commodities and to review the scope for market
intervention measures The composition of the sub-group is given at
!nnexure I
2( PRICE MONITORING IN INDIA
2(1( In India, monitoring of prices are done on a regular basis both from
absolute prices and price indices "#hart-$%
C)%rt-1
&onventionally, market prices in India mostly refer to wholesale prices and2
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retail prices 'holesale prices refer to the prices at which transactions
take place at the wholesale market (etail prices are those at which
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 consumers 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 "wwwagmarnetnicin % 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 The prices in their data
feeding network are uploaded by the !gricultural Produce Market
#ommittees "!PM#%
&)) +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
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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
&2The 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"cis
D%t% S!urc N! !'C"trs
.u!t%ti!"s
C!&&!/itisC!r/
F!r& !'/%t%
Pri!/icit, %g
3ffice of the/conomic !dviser,
+IPP
428&9uotations
6:6 'hole salePrice Index
'eekly for Primary and;uel . Poweruisite
6( STRATEG3 FOR THE T9EFTH PAN
6(1(C!"rti"g PMC i"t! Ess"ti%# C!&&!/itis M!"it!ri"g Diisi!"
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
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5.1.2.1. C%$%cit, *ui#/i"g !' t) :isti"g &%"$!;r 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 nationaluality, reliability and
regularity of the data, PM# needs to be strengthened by thedeployment of additional manpower Two Joint +irectoruired
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
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price collection mechanism and to advise on improvement
4&& ;or improving efficiency of data collection, cent-per-cent online
system needs to be put in place ;or this appropriate financial
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 marketprices, officials associated with PM# will have to be trained on the
subHect
6((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
42$ Su*scri*i"g t! t) Srics !' 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 oforganisations such as Dewswire $8, !griwatch, Indiastat and
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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
42& Hiri"g Pr!'ssi!"%#s =D!&%i" :$rts> - To handle the
challenges of commodity analysis >ualified personnel with
appropriate knowledge and skills are re>uired PM# in its present
status is not endowed with ade>uate manpower resources with
re>uired skillsThus, 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 inpolicy formulation
42) E"g%gi"g $ri%t !rg%"is%ti!"s '!r c!"/ucti"g rs%rc)
stu/is %"/ sur,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 upfield 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%r8t I"tr"ti!" Su$$!rt M%surs
6(6(1( E:isti"g M%surs
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
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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
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farmers
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"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
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A"":ur-I
#3MP30ITI3D 3; T/ 071-*(37P 3D P(I#/ M3DIT3(ID* !D+
M!(/T IDT/(E/DTI3D
#onvener- 0enior /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
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A"":ur-II3EAR-9ISE CENTERS@
S(N!(
C"trs 'r!&;)ic) $rics ;rc!##ct/ i" 2006 S(N!(
C"trs%/// i"2007 S(N!(
C"trs %/// i"2010 S(N!(
C"tr
/#t/i" 2011
NORTH ONE
$ +/5I $ #handigarh $ I0!(
& 0IM5! & 0hrinagar & !(D!5
) 57#D3' ) Jammu ) M!D+I
2 !mritsar 2 1!TID+!
4 5udhiana 4 !DP7(
6 +ehradun 6 E!(!D!0I
: !*(!
9EST ONE
2 !M/+!1!+ : (aipur 8 J3+P7(
4 13P!5 @ 3T!
6 M7M1!I $= D!*P7(
: J!IP7( $$ ID+3(/
$& (!J3T
EAST ONE
8 P!TD! 8 (anchi $) 1!*!5P7(
@ 171!D/0'!( $2 #7TT!#
$= 35!T! $4 0!M1!5P7(
$6 0I5I*7(I
NORTH-EAST ONE
$$ *7'!!TI @ 3IM! $: IT!D!*!( $ 3IM!
$& 0I553D* $8 +IM!P7($) !IN'!5
$2 !*!(T!5!
SOUTH ONE
$4 A+/(!1!+ $@ EiHaywada
$6 1!D*53(/ &= +!('!+
$: TP7(!M &$ /(D!75!M
$8 #/DD!I && +ID+I*75
&) TI(7#I(!P!55I
1 C"trs 25 C"trs 60 C"trs 4 C"trs
# Status as on $ul %&''
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A"":ur-III CENTRE-9ISE DATA REPORTING S3STEM @
0DoO"#i" D%t%F/i"g 0Do
R$!rt/*, -M%i# 0Do
R$!rt/*, F%:
NORTH ONE
$ +elhi $ #handigarh $ isar
& 0himla & 0hrinagar & arnal
) Mandi ) Jammu
2 5ucknow 2 !mritsar
4 anpur 4 5udhiana
6 Earanasi 6 1hatinda
: !gra : +ehradun
9EST ONE
8 (aipur ) Jaipur 8 Jodhpur
@ !hmedabad @ ota
$= (aHkot
$$ 1hopal$& Indore
$) Mumbai
$2 Dagpur
EAST ONE
$4 Patna $= (anchi
$6 1hagalpur $$ olkata
$: 1hubaneshwar $& 0iliguri
$8 #uttack
$@ 0ambalpur
NORTH-EAST ONE
2 *uwahati $) Itanagar
4 0hillong $2 !iCwal
6 !gartala $4 +eemapur
SOUTH ONE
&= yderabad : 1anglore
&$ EiHaywada 8 +harwad
&& Thiruvanthapuram
&) #hennai
&2 +indigul
&4 Thiruchirapalli
&6 /rnakulam
# Status as on $ul %&''
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A"":ur IV
3%r ;is r?uir&"t !' 'u"/s '!r str"gt)"i"g Pric M!"it!ri"g C##
=i" Rs( #%8)
%( Str"gt)"i"g !' PMC %"/ Pric M!"it!ri"g Mc)%"is&
%t C"tr
Pur$!s '!r ;)ic)'u"/s %rR?uir/
2012-1 201-14 2014-16 2016-17 2017-15 Pri!/2012-15
C!"stituti!" %"/Srici"g !' %" E:$rtC!&&itt
C!"rti"g PMC i"t!ECMD
&=2= &&22 &268 &:$4 &@8: 124(64
Org%"ii"g Tr%i"i"g
Pr!gr%&&s '!r t)O''ici%#s !' PMC
&4 &6&4 &888 )=)& )$82 142(2
Su*scri*i"g t! t)Srics !'Pr!'ssi!"%#Org%"is%ti!"s
&= && &2 &6 &8 120
Hiri"g Pr!'ssi!"%#s=D!&%i" :$rts>
)= )) )6)= )@@) 2)@& 1(16
E"g%gi"g $ri%t!rg%"is%ti!"s '!rc!"/ucti"g rs%rc)stu/is %"/ sur,s
4= 4&4= 44$) 4:8@ 6=:8 257(0
T!t%# 146(4 167(1 17( 11(2 14(41 47(2
*( Str"gt)"i"g !' NIC
0trengtheningDational
Informatics #entre"DI#%
10 11 12(1 1(1 14(74 71(06
c( Str"gt)"i"g !' PMCs i" St%ts
/mploying TrainedManpower at state
$&= $48 &=$6= &2@6 )=&2 101(7
3rganiCing'orkshops
$= $$ $&$ $))$ $262 71(06
IT Infrastructureto #entres
&= &4 )$&4 )@=6 288) 174(14
T!t%# 160 14 244(6 01(5 76(5 1267(5
GRAND TOTA==%*c>
06(4 71(1 427(04 47(65 654(2 2174(12
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