Special Correspondent

‘Twin dangers' of price rise, FTA

Thiruvananthapuram: Finance Minister T.M. Thomas Isaac has promised a ‘strong struggle to rectify policies that generate price rise.'

Terming price rise as one of the biggest dangers faced by the State, Dr. Isaac blamed the Centre for the situation. “Instead of creating a buffer stock of sugar, artificial scarcity was created by exporting sugar only to help mill owners,” he said. The reduction of the PDS [public distribution system] rice quota for the APL [above poverty line] category and an increase in its sale price from Rs.8.50 to Rs.14 to Rs.16 would contribute to overall price rise, he said in his budget speech. By selling food grains to private monopolies under the open market sale system, opportunities for hoarding and speculation have been opened, he said.

He said it was not possible to accept the view that the State government should bear the burden of subsidising the price rise created by the Centre. Kerala has the lowest extent of price rise. Compared to December 2008, the consumer price index in rural areas has increased by 9.6 per cent in the State in a year whereas the national average is 17.7 per cent.

“This achievement is the result of the bold and confident steps taken by the State government. But this has imposed an unbearable burden on the State government and agencies like Supplyco and Consumerfed,” he said.

Indo-ASEAN pact

The Indo-ASEAN Free Trade Agreement (FTA) was the second danger that the State was facing.

The entry of ASEAN countries in national markets would seriously affect cash crops of the State. He feared that such an eventuality would destroy the State's agriculture sector and bring back the dark era of farmer suicides.

He said it was imperative to restore the universal public distribution system in order to face a crash in the price of cash crops. Dr. Isaac wanted a re-examination of the stipulations on safeguards in the Indo-ASEAN agreement and a special package for the State to compensate the loss it would sustain owing to the implementation of the agreement.