Govt official says good rain, GST cut, imports will keep food inflation down
This story was originally published at 19:56 IST on 22 September 2025
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By Pallavi Singhal
NEW DELHI – The government does not see food inflation rising in the financial year 2025-26 (Apr-Mar) with good monsoon rainfall pushing up crop acreage and yields and given the duty-free imports of key pulses and the recent goods and services tax cut, which has lowered prices of key kitchen consumables, a senior government official said. Though there is some concern about paddy production after the floods in parts of Punjab and Haryana, the official said preliminary estimates show the losses are less than 10% of Punjab's total expected paddy output.
"If we take into account the entire country, I see production of paddy at par with last year, if not more," the official said. Punjab has been reeling from the worst floods in over three decades, with more than 175,000 acres of farmland submerged and paddy crops destroyed, according to initial government estimates. However, government data also show the country's paddy acreage up nearly 2% on year at 43.90 million hectares as of Sept. 19.
On pulses production, there has been some concern about tur, with acreage of the crop sliding 1% on year to 4.58 million hectares. Moreover, intense rainfall in top tur-producing states Maharashtra and Karnataka has damaged some of the standing crop, traders and farm experts had earlier told Informist.
However, the government is not perturbed as the losses may be limited. "Tur is a long-duration crop, generally requiring about 180 days, which is still in its flowering stage, and the damage inflicted is unlikely to be severe," the official said. "Some varieties of 120 days may have been impacted." While the government does not have an estimate of how many farmers have sown the short-duration crop, the official said prices are unlikely to rise as imports of most key pulses continue to be duty-free.
India has allowed duty-free import of yellow pea, which is used as a substitute for both chana and tur, as also of tur, urad, and moong till Mar. 31. Imports of chana attract 10% import duty.
While the agriculture ministry remains worried about duty-free imports of yellow pea, which, as per an Informist report, may bring down chana acreage, the official said India can always import pulses. "We have several markets growing pulses only for us," the official said. "If at all there is a problem and we see prices rising, we will import to keep them in check." India imports tur from countries such as Mozambique, Tanzania, and Myanmar, and chana from Australia, Russia, and Tanzania.
Meanwhile, the government sees both the kharif and rabi crops this year being "bountiful", buoyed by a good monsoon, which is 7% above normal so far in the southwest monsoon season. This is why it last week raised the food grain production estimate for the crop year 2025-26 (Jul-Jun) to 362.50 million tonnes, from 354.64 million tonnes projected in May.
Additionally, the GST cut, which has resulted in reduced prices of kitchen essentials such as packaged milk, paneer, eggs, ghee, and oil, will deter food inflation, the official said. "The government has not just cut tax but also ensured that the benefit is passed on to the public," the official pointed out.
On the recent uptick in CPI inflation, which rose to 2.07% in August from the low of 1.61% in July, the official said it was a seasonal change, as prices of vegetables rise because of supply-chain issues. "We do not see it rising to any worrying level," the official said. End
Edited by Rajeev Pai
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