‘Supply of commodities is disrupted by hoarders anticipating higher prices’
The Modi Government is considering making hoarding of essential commodities a non-bailable offence.
At a conference of State food and consumer affairs ministers here, Union Finance Minister Arun Jaitley, on Friday, said there was no need for panic as the country had enough food stocks, but the abnormal increase in prices of two-three commodities was owing to hoarding in anticipation of higher prices.
“…it is not an issue of scarcity, but it is an issue of supply side. These commodities are available in sufficient amount but the normal supply is disrupted by hoarders anticipating higher prices,” Mr. Jaitley said.
“Monsoon has just started, it is a late start, and it is too early to create any panic.” Should the rainfall turn out to be deficient, the government was equipped to deal with the situation, he asserted.
Speaking to reporters after the conference, Mr. Jaitley said the suggestion from some States was to strengthen the Essential Commodities Act and making hoarding a non-bailable offence. The Central government would take a view on this, he said. State ministers also recommended that storage facilities should be improved.
“Some States suggested a price stabilisation fund. In case price of in certain commodities go up, there could be market intervention,” he said.
Food inflation, according the latest available official data, rose to 9.5 per cent in May.
Food Ministers of some States, however, said the Centre was trying to escape from the responsibility of controlling inflation by putting all the blame on State governments.
Later, addressing a press conference, Union Minister for Consumer Affairs, Food and Public Distribution Ramvilas Paswan said the setting up of fast-track courts for hoarders and black marketers should be considered.
Mr. Paswan also said that while improving agricultural productivity was crucial for increasing the overall availability of essential food items, equally important was the removal of the restrictions on free movement of these items to curb the speculative activities that were leading to price rise.
The Food Minister also urged States to roll out at the earliest the National Food Security Act as it would have an anti-inflationary impact.
“We have to be well prepared with an advance co-ordinated strategy in collaboration with all the State governments”, Mr. Paswan said.