The Union Budget 2025-26 announced a six-year Mission for Aatma Nirbharta in Pulses, directing NAFED and NCCF to procure tur (pigeon peas), urad (black matpe) and masoor (lentils) from pre-registered farmers over four years. The Department of Consumer Affairs has set a self-sufficiency target for pulses by 2027. Both commitments rest on one premise: farmers will expand acreage and output when price incentives are stable and remunerative. That premise requires private market infrastructure to function. The government’s demand-side intervention architecture is steadily eroding that infrastructure.

In June 2024, the Department of Consumer Affairs imposed stock-holding limits on tur and chana (chickpeas) across all states and Union Territories under the Removal of Licensing Requirements, Stock Limits and Movement Restrictions on Specified Foodstuffs (Amendment) Order, 2024. Wholesalers were capped at 200 tonnes per pulse. Retailers were capped at five tonnes. Importers were directed to clear stocks within 45 days of customs clearance. Comparable orders were issued for tur, urad, moong and chana in 2021 and 2023. This is not emergency policy. It is a recurring instrument, and private market participants treat it as a structural feature of pulse markets.

Measurable consequences

The consequences for price-discovery infrastructure are measurable. India’s National Commodity and Derivatives Exchange lists futures contracts for these four pulses, serving two functions: hedging for traders, millers and importers, and forward price signals for farmers making sowing decisions. Both depend on private participation at scale. An importer required to liquidate physical stocks within 45 days has no rational basis for holding a futures position beyond that window. A miller constrained to 25 per cent of installed capacity faces volume limits that reduce future engagement. NCDEX open interest and contract volume data for tur and chana show systematic thinning following major stock-control announcements. This is not price volatility. It is a withdrawal.

Basis spreads, the difference between mandi spot prices and NCDEX futures prices, widen when movement restrictions tighten across major producing states. This reflects reduced arbitrage capacity rather than random price noise. When inter-state movement of pulses is restricted, spatial price integration deteriorates. e-NAM, the Ministry of Agriculture’s electronic national agriculture market launched in 2016, was designed on the premise that open inter-state movement would create a unified national price. State-level movement bans and disclosure mandates that vary by jurisdiction work against that logic directly.

The Price Stabilisation Fund received cumulative allocations of ₹37,489 crore from 2014-15 to 2024-25, with ₹10,000 crore budgeted for 2024-25 alone. Buffer stocks procured at MSP are released through Bharat Dal retail sales and mandi-level disposals at subsidised rates. When government procurement enters a market at MSP, private buyers either match the price or step back. When buffer stocks are released below prevailing market rates, private millers face a margin environment that discourages investment in storage and processing capacity. The Commission for Agricultural Costs and Prices has noted this tension in its pulses reports. MSP for toor has improved over successive years. On-farm realisation in non-procurement states nonetheless lags the support price consistently.

Interrupting signal source

A functional futures market transmits forward price signals from NCDEX to farmers and aggregators without requiring government procurement to serve as the price intermediary. That transmission is how acreage response to price incentives operates at scale. Recurring stock controls, 45-day clearance requirements and subsidised buffer disposals interrupt that signal at source. A farmer in Maharashtra or Rajasthan deciding what to sow ahead of the kharif season makes an investment decision informed by expected returns at harvest. When futures contracts carry thin open interest because private traders have withdrawn, the signal reaches no one.

The government’s short-run interventions have produced real and visible outcomes. Retail tur dal prices moderated following the June 2024 order and the concurrent reduction of import duty on desi chana to zero. Consumer welfare gains of this kind matter. The harder question is whether a policy design that repeatedly suppresses price-discovery infrastructure in response to retail price spikes is compatible with a six-year mission to build domestic supply through farmer-level incentives. If private trade withdraws because hedging has become commercially unreliable, government procurement must expand permanently to fill the gap. That is not self-sufficiency. It is subsidised substitution with a growing fiscal bill.

The author is an Independent Public Policy Researcher

Published on June 13, 2026