M A I N   N E W S

PM discusses ways to tame inflation
Vibha Sharma
Tribune News Service

New Delhi, January 11
A worried Prime Minister Manmohan Singh today held a meeting with senior ministers and bureaucrats to find ways to tame food inflation. The high-level meeting, however, ended inconclusively.

Finance Minister Pranab Mukherjee, Agriculture Minister Sharad Pawar, Home Minister P Chidambaram, Cabinet Secretary KM Chandrasekhar, Planning Commission Deputy Chairman Montek Singh Ahluwalia and Chief Economic Adviser to the Finance Ministry Kaushik Basu attended the two-hour meeting at the Prime Minister’s 7, Race Course Road residence.

Officials say top leaders and bureaucrats are likely to again meet tomorrow or day after to find ways to provide relief to the common man. They say that the Tuesday's meeting was not specifically on food inflation alone as talking points integrated the overall price situation, including an assessment of all factors driving up prices and possible remedies.

Besides food prices, Pawar is understood to have raised the issue regarding export of agricultural items. Another issue discussed was implication of a possible rate hike by the Reserve Bank of India when it takes up the periodical review of the monetary policy this month.

Points discussed also included recommendations discussed by a committee of secretaries that met on January 6. It is learnt that alternative measures were also discussed like doing away with import duty on certain commodities and banning their export.

Meanwhile, multiplying the government’s problems is the possibility of Delhi wholesale onion traders going on a strike, alleging “harassment by the government”.

Even as clear signs have emerged of traders and middlemen indulging in hoarding and profiteering at the cost of consumers, traders say they are not responsible for shortage. “We are neither hoarding nor profiteering,” says Tomato and Onion Merchants’ Association (Azadpur Mandi) General Secretary Rajendra Sharma.

The strike call by traders in Azadpur Mandi, Asia’s biggest fruits and vegetable market, follows a similar move in Nashik, Maharashtra, where the crisis was averted on Monday following intervention by the local authorities.

Onion, already selling at Rs 60/kg in the Capital, may go up in case the government does not intervene. Sources say the government may invoke ESMA against traders if they go on the strike. Since last week, Income Tax authorities are carrying out surveys and raids on traders in different parts of the country to check hoarding.

Prices of food items, especially onions, have led to a sharp rise in India’s annual food inflation to 18.32 percent for the week ended December 25. While prices of rice, wheat and pulses are currently stable, vegetable prices are high with onion ruling at between Rs 55and 60 per kg in most parts as supplies remain sluggish.

Measures like asking states to curb hoarding haven't yielded success, while income tax raids on traders in Nashik and Delhi have backfired.

Accusing the government of not taking proactive steps to check rising food prices, the BJP said the “inability” to control inflation was the “biggest failure” of the “economist Prime Minister”. The Congress defended the Prime Minister saying that the meeting called by him on inflation proved that the government was "sensitive" towards the issue.

Also putting the onus on the states to check the menace, party spokesman Manish Tewari said the real challenge was how to reduce the gap between farmgate prices and prices which consumers pay.

“To a large extent the responsibility also vests with the states...because the power to act to take action against profiteers, hoarders and those who speculate are with state governments, States should exercise the power efficaciously against hoarding and profiteering,” he added.