Thursday, July 06, 2006

By Gyan Pathak

The present spell of skyrocketing prices of essential commodities in the Indian market is clearly the result of tampering with the Essential Commodities Act. The changes in the law along with the executive orders passed during the tenure of the BJP led NDA government has also been vigorously followed by the Congress led UPA government for the last two years in pursuit of the free market economy.

The irony of this episode is that the Congress leadership at the Centre along with the Chief Ministers of the Congress ruled states are now alleging the BJP, which is also known in the public as a party of the traders, to have changed the rules for the benefit of the traders that eventually created the present crisis of steep price hike in almost all the essential commodities.

The answer to this allegation came from the BJP leader Arun Jaitely. He said it was ironical that the government headed by an economist should be messing the economy and suggested that the Congress put its house in order instead of blaming the BJP.

As for the changes in the policy regarding the essential commodities during the NDA rule, he said that the NDA government regime was an era of surpluses and any decision it took should be considered in that context.

Pointing out the contrast, Mr Jaitely said that the Congress led UPA government has fallen into and “economy of shortage” , which the present government is supposed to deal with. If any correction in the policy was required, the government could have effected in it over two years tenure.

It is clear from the arguments and counter arguments that both the BJP and the Congress are trading charges while they have been doing everything to create a free economy in this country. In the meantime common people are suffering a lot and the traders are making big money.

Let us put the matter on record. The NDA government had rescinded all Control Orders under the Essential Commodities Act in February 2002. That action made the central and the state governments powerless. Technically speaking governments cannot intervene in cases of hoarding of essential commodities.

Not only that, in the fag end of its tenure, the NDA allowed even the private traders and multinationals to purchase food grains from the market.

Exporters of agricultural produce, especially food grains and pulses, were also allowed to export. They were given additional facilities to reimburse the expenses incurred in transporting and trading under the WTO rules.

The Congress led and Left supported UPA took over the reins of the government in May 2004. It just followed the BJP's policy in this regard. It actually allowed multinational companies for the first time to purchase food grains directly from the market. This resulted into a severe crisis because Food Corporation of India could not even procure the required quantity of wheat for the Public Distribution System. Initially the Centre allowed imports of wheat, but after much criticism it decided to purchase from those private traders at market rates who have stocks with them. The exercise is clearly tilted towards the traders, and obviously, it is against the farmers and the common people.

Now fearing a political fallout of the skyrocketing prices of essential commodities, the Congress leadership, not the government, is trying to show that the party is concerned of the miseries of the people.

It is in this backdrop the Congress President called a meeting of the Chief Ministers of the Congress ruled states to discuss the matter. It is another matter that she avoided to tell her nominated Prime Minister to correct the anomalies for which the party is trying to pass the blame on the BJP.

The Chief Ministers while blaming the BJP suggested a mechanism, which is not in existence at present, to better regulate forward trading in food grains and some other essential commodities to curb excessive speculation. They alleged that the NDA had issued an order removing of licensing regulating stocks limits and movement restriction especially of food grains, which allowed dealers to freely buy, use or consume stock, sell, transport, distribute or dispose of any quantity of paddy/rice, wheat, coarse grain, sugar, edible oil seeds without any regulation, or permit or license.

A million dollar question is : Why the present government under the leadership of Dr Manmohan Singh has not been doing the corrections in this regard? (EOM)