Govt unveils steps to check inflation; to act against hoarders

New Delhi, Jan 13 (PTI) Promising to crack down on black
marketeers and hoarders, the government on Thursday unveiled
measures to check spiralling prices by deciding to continue
ban on exports of edible oils, pulses and non-basmati rice and
asked states to waive local taxes on essential commodities.
After two days of discussions at the highest level,
chaired by Indian Prime Minister Manmohan Singh -- on a day
weekly food inflation showed some moderation -- the government
constituted an inter-ministerial group under Chief Economic
Advisor Kaushik Basu to review the overall inflation with
particular reference to primary food articles.
Admitting that food prices have frequently risen at
"unacceptable rates", a statement issued by Prime Minister's
media advisor said that the "current bout of inflation is
driven by rise in prices of vegetables and fruits which is
more difficult to manage because they are not held in public
stocks."
Attributing the rise in prices, especially the onion, due
to late rains, the government said that fast growth of the
economy, combined with the effect of several inclusiveness
programmes, put greater income in the hands of the relatively
poor whose food consumption increased. This led to rise in
prices of milk, eggs, meat and fish.
On measures that it proposes to take, the government said
it would take stringent action against hoarders and black
marketeers manipulating market prices to ensure products reach
markets in time to moderate prices.
"Cartelisation by large traders will be strictly dealt
with. The States will be requested to ensure that such action
is effectively taken under the Essential Commodities Act,
1955, and the Competition Act, 2002," the statement said.
It said that import and export of all essential
commodities would be reviewed on a regular basis. The
government will "impose controls on exports and ease
restrictions on imports, including tariff reduction where
necessary, to improve domestic supplies," it said.
The food inflation, measured by wholesale prices, for
the week ended January 1, 2011, moderated slightly but was
still ruling high at 16.91 per cent.

Earlier in the day, Finance Minister Pranab Mukherjee
said that "unnecessary" panic should be avoided. "We have
analysed the situation. We have indicated what further steps
we are going to take. We have also indicated that there should
not be any unnecessary panic."
The only lasting solution to food inflation lies in
increasing agricultural productivity, the statement said.
Other measures include that public sector undertakings
will intensify the purchasing of essential commodities,
particularly edible oils and pulses and distribute through
ration shops.
The existing scheme of subsidised distribution of edible
oils and pulses will continue.
State Governments would be urged to review Agricultural
Produce Market Committee (APMC) Acts and in particular,
consider exempting horticultural products from its purview.
They would also be requested to consider waiving mandi
tax, octroi and other local levies which impede smooth
movement of essential commodities, as well as to reduce
commission agent charges.
The Committee of Secretaries under the Cabinet Secretary
will review the price situation with individual States.
The Government said it was watching the situation closely
and is committed to containing the adverse impact of any
inflationary pressures on the common man.
Investment will be encouraged in supply-chains,including
provisions for cold storages, which will be dovetailed with
organised retail chains.
Department of Industrial Policy & Promotion, Department
of Food & Public Distribution and Ministry of Food Processing
Industries and the Planning Commission will jointly work out
schemes in this regard.
Support will be extended to facilitate stocking of the
bumper Kharif 2010 crop, including augmentation of storage
capacities and upgrade the godowns and other infrastructure.
PTI LUX
RCJ