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Updated: November 26, 2009 21:49 IST

Price rise: Pawar, Pranab seek States’ cooperation to check trend

J. Balaji
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Finance Minister Pranab Mukherjee and Agriculture Minister Sharad Pawar during a meeting in New Delhi. File Photo: R.V. Moorthy
The Hindu Finance Minister Pranab Mukherjee and Agriculture Minister Sharad Pawar during a meeting in New Delhi. File Photo: R.V. Moorthy

As the Opposition parties went hammer and tongs against UPA government’s “economic policies and lack of political will” which had led to “unprecedented increase in the prices of essential commodities”, Agriculture Minister Sharad Pawar and Finance Minister Pranab Mukherjee indeed accepted that the prices have moved up and sought the cooperation of the State governments to arrest the trend.

In fact, Mr. Pawar, replying to the special debate on the rise in prices of essential commodities in Lok Sabha on Thursday, told the State governments: “we have to face this problem collectively.” On its part, the Centre was taking administrative and fiscal measures to provide some relief to the consumers.

The Centre was “quite serious” about the situation and would take steps to increase food production and also infuse some protection measures in the interests of farmers.

He reminded that 299 districts in various States were declared drought-hit and production of some food products were expected to come down this year; and appealed to the States to streamline the public distribution system (PDS) to ensure that there was no leakage, diversion or hoarding of essential commodities. They should ensure that only genuine families get PDS supplies.


Accepting that the prices of rice, wheat, sugar, pulses, vegetables particularly potato and onion, and edible oil have gone up, Mr. Pawar pointed out that despite that the issue, price of rice, wheat, sugar and kerosene to the targeted sector of PDS was not changed by the Centre since 2001. Similarly the procurement price of paddy and wheat were increased manifold. He attributed the price rise for various factors which include poor monsoon, pest attack, and diversion to other crops by farmers due to low procurement price for sugarcane in Uttar Pradesh etc.

Finance Minister Pranab Mukherjee, intervening in the debate, asked the States to activate PDS and provide relief to the people suffering from increasing prices. “The States have to take is the responsibility of the State governments to take action.”

Poor management

Citing an example of the poor management, Mr. Mukherjee said “ one State I found, because of overgrowth of potato production, they could not buy it, there were not adequate storing facility, it was simply dumped on the street.” When potato/ vegetables prices increases, the Union finance or agriculture ministry could not be squarely blamed. “Surely, it is bad management [of some States].”

Mr. Mukherjee said the Centre alone could not be expected to handle this situation as part of the responsibility lies with the States. The Centre would perform functions like monetary policy, fiscal policy, export and imports, which fall under it. The Centre had banned export of all items, including wheat and non-basmati rice, that were in short supply, he said, adding even basmati rice and onions have a minimum export price of $ 900 and over $ 400 a tonne respectively.

“We want to give farmers more prices. Because, I know there is still huge mismatch. From the fields to the markets, but who is to do it. If you expect it to be done centrally, I am afraid, in our democracy in our cooperative federalism, it is not possible,” he said.

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