Faced with mounting criticism over sky-high onion prices, the government has asserted the situation will improve “very quickly” thanks to steps taken to increase availability, including transportation of stocks to markets where the commodity is in short supply.

“I think it will ease very quickly. We had a Committee of Secretaries meeting, so we have decided to move onions from different areas… We will certainly do whatever required bringing down the prices of onions,” Cabinet Secretary K M Chandrasekhar told reporters in New Delhi.

He said the Railways has agreed to provide the rakes required to move onion stocks from different parts of the country to retail markets worst affected by the supply shortfall.
Onion prices have skyrocketed in recent days, as crops in the main producing state of Maharashtra have been damaged due to unseasonal rains.

“I understand there is a shortfall in Maharashtra, but Karnataka is reasonably good and Gujarat is producing quite a lot of onions. We will try to make some more movements,” Chandrasekhar said.

He added that the Commerce Ministry is also scouting for overseas sources to import onions.

“They are trying to find out what is available, where it is available,” the Cabinet Secretary said.

With a view to bring down onion prices, which had raced to as much as Rs 85 per kg in some retail markets, the government had on Tuesday night removed customs and countervailing duties on onions. The commodity earlier attracted 5 per cent customs duty and 4 per cent countervailing duty.

Furthermore, the government Wednesday announced an indefinite ban on exports of onions. In addition, consignments of onions have been making their way into the country from neighbouring Pakistan at rates almost four times less than the peak rate seen in retail markets like Delhi.

Consequently, wholesale prices of onions have begun to fall rapidly and the effect is also beginning to show in the retail market.

Wholesale onion prices rose by 4.56 per cent during the week ended 11^th December.

The skyrocketing onion prices have provided more ammunition to critics of the government in the Opposition, who were already protesting the decision not to constitute a Joint Parliamentary Committee to probe the 2G telecom scam.