Govt blows inflation battle bugle

The Narendra Modi government has declared war on inflation with Union finance minister Arun Jaitley announcing a series of tough measures on Tuesday to rein in prices. As part of the bold initiative to tame the inflation monster, Jaitley said that fruits and vegetables would be delisted from the Agricultural Produce Marketing (APMC) act in Delhi. He has advised the other states to do likewise.

Jaitley said that Delhi lieutenant governor Najeeb Jung has been asked to procure onions and potatoes from the open market and flood the Mother Dairy retail outlets so that consumers get an abundant supply at cheaper prices. He has also been asked to delist all food items in the Capital, a move that will enable farmers to sell their produce directly in the market.

This would pave the way for breaking the monopolistic stranglehold of a handful of traders over these commodities, which results in high prices being charged from consumers while farmers get rock- bottom rates for their produce. Maintaining that only four or five commodities have witnessed a spike in prices, Jaitley said that states have been asked to crack down on hoarders trying to exploit apprehensions of a weak monsoon. About 50 lakh tonnes of rice will be released in the open market through state governments to cool prices.

While a $ 300 per tonne minimum export price on onion has already been imposed, a similar levy on potatoes will be decided by the commerce ministry to discourage exports and boost domestic availability to bring down prices, he explained.

With regard to pulses and edible oil, states will be given a line of credit to directly import them to meet local demand so that prices come down, Jaitley said.

The government is closely monitoring prices of 22 commodities and will take steps to curb volatility. Rising prices of essential food items like vegetables, fruits and cereals pushed up inflation to a five- month high of 6.01 per cent in May. The prospect of a sub- normal monsoon and the surge in crude oil prices due to the civil strife in Iraq may further worsen the price situation.

Courtesy: Mail Today