Premier Modi’s Central government today increased the incentives given under Merchandise Exports from India Scheme (MEIS) from 5% to 10%. The goal is to boost domestic prices.
Onion prices have been ruling at highly un-lucrative levels for the growers for a prolonged period, as the stored stock of the previous season hasn’t got over yet. Wholesale rates of onions had touched as low as Rs 1/kg (€0.02). It has led to wide-scale resentment among farmers, who for the last months have been protesting using innovative methods.
In July, a 5 per cent export subsidy on onions had been announced by the Centre. This subsidy had buoyed exports, with India sending out 2,14 million tonnes of onions in the last financial year — the highest in the last five years. This move comes when onion prices at wholesale markets are touching record low. On December 26, the average traded price of the bulbs at the Lasalgaon’s wholesale market in Nashik district was Rs 535 per 100 kg.
A delegation representing various stakeholders in the onion trade had met union cabinet minister Nitin Gadkari in the national capital on December 28, requesting an increase in MEIS incentives.
The decision is expected to boost domestic prices by increasing exports, which are already continuing in full swing as Indian onions are available at competitive prices.