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| Centre shifts the blame for price rise to States | | |
ABID SHAH
NEW DELHI, JAN 13: Wittingly or unwittingly, the Central Government has got trapped in the quagmire created by spiraling prices of essential items led by sugar.
No sooner than the Government has geared up to fight against rising prices of not just sugar but also wheat, rice and other cereals there are reports that its efforts on the price front could well either come to a naught or left with little effect in case petrol and diesel prices go up.
On a day when the Cabinet Committee met here to review the price situation, newspapers reported that petrol prices could be revised within days in order to be upped by three rupees a litre as Petroleum Minister Murli Deora met Prime Minister Manmohan Singh here today to get his nod for this.
Normally, petrol and diesel prices are revised and made effective from the middle of the month and if Deora has his way petrol prices would cross Rs 50 a litre at most places in the country, including Jammu and Kashmir where petrol right now costs Rs 47.50 a litre.
The hike in petrol prices may have spill off effect on other commodities by raising the cost of their transport. Thus the million ton wheat and rice that Cabinet announced today to release during next two months in order to bring down the price of these essential food items may turn out to be costlier to be ferried from one place to the other by hike in petrol prices. This is going to be more so for States through the Himalyan region, including Jammu and Kashmir, which mostly have road based transport links between towns and villages.
Thus, it will be an uphill task to reduce the prices of food items with a simultaneous hike in cost of petrol and diesel. So the Government move in this respect would eagerly be awaited though movement of petrol and diesel tankers may well slow down for next couple of days because of the leaks about Petroleum Minister’s move to hike the price through the media.
And this is strange since today the Government pointed out that the Cabinet Committee was keen that the State Governments invoke Essential Commodities Act to deter hoarders of cereals and staple food items. A statement issued regarding the decisions taken in the meeting it was said that the Prime Minister may soon call a meeting of Chief Ministers of all States to discuss the issue of price rise. This meeting as per certain TV channels can well take place on January 27 which is not very soon and is as far as two weeks from now.
The 11-point government statement mainly says, “the Cabinet Committee on Prices reviewed the price situation in the country and gave clear instructions for bringing down the prices of essential commodities in the immediate future. (It decided that) the Prime Minister will hold a meeting of Chief Ministers very soon to discuss the situation of food prices and to review the implementation of Essential Commodities Act with a view to prevent hoarding of essential commodities and also to ensure full lifting of wheat and rice allocated to the States.
“State Governments will be expected to play a more active role in containing prices through effective dehoarding and furthermore they will also be expected to check the cost of intermediation by using their own agencies like State Civil Supplies Corporation for procurement of non-PDS food articles in bulk and distribution to retail consumers.
“Two to three million tonnes of wheat and rice should be released in the open market on priority over the next two months. Two million tons and one million ton of wheat and rice respectively had been allocated to States for distribution to retail consumers over and above the normal PDS allocations. Wherever the State Governments are not lifting the stock, the system of release will be reviewed with a view to ensure that the benefit of cheap food grains is passed on to retail consumers.
“Upto five lakh tonnes of wheat and two lakh tonnes of rice will also be distributed through NAFED and NCCF who will use their own outlets as well as those of affiliated cooperatives to ensure that the benefit reaches retail customers.
“In order to ensure continuous availability of sugar in the market, white/refined sugar will be allowed to be imported at 0% duty up to 31 December 2010. There will be no quantitative cap on imports. The import of raw sugar at zero duty is already permitted upto 31 December 2010.”
As for the reason for the shortage of sugar resulting its price reaching in the open market in places Jammu to Rs 48 a kilogram, the Union Government statement says, “a number of sugar mills in Uttar Pradesh had imported large quantities of raw sugar for processing. The bulk of sugar is still lying in ports or their vicinity on account of restrictions imposed by the Government of Uttar Pradesh on movement of raw sugar into the State. The State Government had been requested a number of times to lift these restrictions but to no avail. In order to expedite the refining of sugar and its availability in the market, government have provided relaxation in the Central Excise Rules to enable processing of this sugar by mills located in other states.”
Moreover, today’s Government statement says that “although the Government of India have waived the duties on import of sugar, some state governments have imposed VAT/other taxes on imported sugar, resulting in substantial increase in the price of this (imported) sugar in the State. The State Governments have categorically been advised to immediately remove VAT/such taxes. The Government of Delhi has already implemented this suggestion and removed VAT.”
Despite this assertion the prices of sugar in Delhi are yet to come down and, thus, the Delhi Chief Minister Sheila Dikshit has initiated the move to sell sugar from Government controlled Kendriya Bhnadar and Mother Dairy outlets at reasonable prices. Earlier this has been the case with lentils when the price of Arhar Dal had touched Rs 100 a kilogram.
So the question is that when the prices of Dals, cereals and sugar could not be uniformly brought down in Delhi which is a Union Territory, how could they be shown a downward trend in far off States. Only a few days ago the Union Minister for Agriculture Sharad Pawar had thrown up his hands and said that he was no astrologer who could set a date for prices to go down. He was first to blame the attitude of UP Government led by Mayawati in sending the prices of sugar to abnormally high.
In the wake of mounting public outrage against price hike Pawar said yesterday that the price of sugar might come down in a week or ten days. This provides a clue as to why the Chief Minister’s meeting is being called on January 27. Pawar has clearly been given less than two weeks to see that the price of sugar comes down.
Another challenge came Pawar’s way when his home State’s Congress Chief Minister in Maharashtra, announced that he would see that sugar was sold at Rs 20 a kilogram throughout the State. Ashok Chavan’s this assertion was directed at Pawar because of which the UPA’s commitment regarding welfare of Aam Admi has been getting badly threatened.
And now it will yet take a few more days before it becomes clear as to what turn the prices of essential items takes. Still the fact borne out by today’s Cabinet statement is that like Pawar the Centre has been trying to pass the buck to the States, mainly UP, even as people across the country had to observe the winter festival of Lohri, Makarsankranti or Pongal (as this is variously known in different parts of the country) with a little less or curtailed use of sugar. |
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