Jaitley wants states to crack down on hoarders
Sanjeev Sharma
Tribune News Service

New Delhi, June 17
Amid macro pressures piling up in the form of rising inflation, fear of a weak monsoon and rising oil prices due to the crisis in Iraq, the Finance Ministry and Reserve Bank of India (RBI) sought to reassure investors that necessary steps will be taken.

Finance Minister Arun Jaitley in a Facebook post blamed speculative hoarding of food articles and high oil costs for the rise in inflation for May at 6.01 per cent. Jaitley stressed that the government was seized of the matter and is committed to ease supply side constraints.

“The rise in prices of food articles can also be attributed to withholding of stocks on account of apprehension of a weak monsoon. The state government should take effective steps to ensure that speculative hoarding is discouraged,” Jaitley said.

While the Centre is asking states to take action, it may be big ask to check hoarding as expectations of a weak monsoon and subsequent higher prices of food articles will be an economic reality difficult to ignore. On the rupee which fell sharply yesterday, Jaitley said the government is watching the movement of rupee closely. The slight instability of rupee is essentially because of Iraq oil shocks and global fear of oil price rise, he said.

The rising oil prices have also raised concerns of heightened inflation and increase in fuel prices in India. The RBI today said the country has enough foreign exchange reserves and is better prepared to deal with any external shock. “We are watching the inflation situation. Food prices have had an effect in the last couple of months,” he said, adding that food prices may come down with appropriate food management by the government.