Budget 2020: Fund To Be Created For Containing Inflation

To spur the economy and at the same time curb inflation which for the month of December even breached the 4% RBI target with CPI inflation reported at a 5-year high of 7.35%, the government in its Budget 2020 speech proposed creation of a PSF or price stabilization fund. The fund is intended to check inflation and curb price rise of essential food items including vegetables.

Budget 2020: Fund To Be Created For Containing Inflation

"Government has taken various measures from time to time to stabilize prices of essential food items..Government is also implementing PSF to help moderate volatility in prices of agri-horticultural commodities like pulses, onion, and potato," said the Union Budget 2020-21 presented by Finance Minister.

There was unusual price rise seen in some of the vegetables including onion, tomatoes and potatoes which remain as key ingredients of our Indian household. The prices of onions flared beyond Rs. 150 levels per kg.

Pulses too saw an increase in price owing to a decline in acreage as well as lesser price realization in the earlier years because of supply glut.

The government on the front said it took on the fiscal policy and trade measures such as import duty, export restrictions, minimum export price, imposition of stock limits other than advising states for action against black marketers and hoarders for regulation the availability of items as well as keeping prices in check.

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