M A I N   N E W S

Hoarding behind price rise, say Cong CMs
Tribune News Service

New Delhi, July 5
Chief Ministers of Congress-ruled states today asked the Centre to reconsider a 2002 order, issued by the NDA regime, to empower state governments to take action against hoarders.

The previous government’s order, amending the Essential Commodities Act, had allowed free inter-state sale and purchase of foodgrains, removed restrictions on essential commodities and curtailed the powers of state governments in taking action against hoarders.

Following this change, state governments are now required to take the concurrence of the Centre before proceeding against defaulting dealers.

This suggestion on delegation of greater powers to the states was made at the meeting of Congress CMs, convened by party president Sonia Gandhi to review the steps taken by their governments to moderate the recent increase in prices of essential commodities.

Blaming the NDA regime for amending the Essential Commodities Act to favour traders, the Congress CMs maintained that because of this change, state governments found themselves handicapped in taking action against hoarders.

Stating that hoarding was one of the factors responsible for the spurt in prices, the Chief Ministers also requested that forward trading in foodgrains and some other essential commodities should be better regulated in order to curb excessive speculation. Forward trading has also been identified as a major cause for the rising prices of foodgrains like wheat and pulses.

Besides the NDA government, the UPA government in general and Agriculture Minister Sharad Pawar in particular, were the targets at today’s meeting as speakers pointed out that the Centre had failed to strike the right balance between the interests of the farmer and consumer. They blamed the low procurement of wheat on the entry of private players who were allowed to pick up unlimited stocks from the farmers at the cost of the state.

Similarly, it was said the decision on hiking the MSP should have been taken much earlier as it failed to make any impact on the procurement. Instead, the

Centre should have authorised the states to go in for market intervention which would have allowed official agencies to buy wheat at the prevailing price which could have been channeled into the public distribution system (PDS).

The Congress president, on her part, expressed concern over the poor functioning of the PDS and wanted the Chief Ministers to take necessary measures to ensure that it functioned effectively and provided essential commodities to the common man at reasonable prices. Mrs Gandhi, it was stated, reminded the Chief Ministers about the Congress party’s commitment to the poor and vulnerable sections and wanted them to take special care that they did not suffer.

Prime Minister Manmohan Singh, Finance and Defence Ministers P. Chidambaram and Pranab Mukherjee, who were also present at the two-hour meeting, assured the Chief Ministers that they would look into their suggestions.

However, the government is in a dilemma over these proposals as it believes that issues like allowing private players to purchase unlimited foodgrains, free inter-state movement of foodgrains and forward trading of commodities are the very essence of economic liberalisation and had actually helped the farmer.

The Centre does not want to be seen taking any steps which will usher in “inspector raj” and end up harassing the common man. At the same time, it cannot remain oblivious to the hardships being faced by the consumer because of the spurt in prices of essential commodities. More so, because this has seriously damaged the Congress party’s pro-poor image.

This dilemma was evident from Andhra Pradesh Chief Minister Y.S. Rajasekhar Reddy spoke in favour of free movement of foodgrains which, he said, had benefited farmers.