Blaming hoarders for the recent spurt in food prices, Finance Minister Arun Jaitley said on Friday that there was no need to panic as there are adequate food stocks in the country and promised stern action against black marketers, amid indications that hoarding could be made a non-bailable offence.
In a meeting of states food ministers called by the Government to discuss the pressing issue of price rise of food items, it was decided that the Centre will set up a price stabilisation fund to enable market intervention by states to tackle the problem. Also there was a consensus among the ministers for strengthening the Essential Commodities Act to make hoarding a non-bailable offence.
Addressing the meeting, the Finance Minister said that the Government has in the past few days imposed minimum export price on staple kitchen items like onions and potatoes and put stock holding limits on these. "One thing is clear that there is no panic situation. Whatever feedback we have got from state ministers is that there is no need for panic," Jaitley said after the meeting.
Stating that prices of vegetables and pulses generally rise in July, he said this time there is an abnormal increase in prices of 2-3 commodities but "there is no panic situation." Allaying fears of the impact of a delayed monsoon on prices, he said "monsoon has just started, it is a late start and it is too early to create any panic".
To deal with the price situation, Jaitley said some states have suggested strengthening of the Essential Commodities Act and making hoarding a non-bailable offence. The Government and the Consumer Affairs Ministry will take a view on the suggestions of making hoarding a non-bailable offence, he added.
Food inflation rose to 9.5 per cent in May, while the WPI inflation was at a five-month high of 6.01 per cent. Referring to onion and potato prices, Jaitley said "there has been a record output and there is no shortage of these items. Therefore 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," the minister added.
However, he said, "we have sufficient food grains stock with the government of India to face to any kind of situation. Depending on where the shortfall or deficient areas are....If such a situation arise, we are equipped to deal." In order to rein in prices, Jaitely said most of the state ministers suggested that the Centre should help them in augmenting storage facility. "Some states suggested a price stabilisation fund. In case if prices in certain commodities go up, there could be market intervention," the Finance Minister said.
The meeting was also attended by Food Minister Ram Vilas Paswan and Agriculture Minister Radha Mohan Singh. Noting that the current price rise is a temporary phenomena created by hoarders, Paswan asked the state governments to enforce the Essential Commodities Act effectively. Earlier addressing the meeting, Jaitley said that there are reports of below normal monsoon this year and hoarders are taking advantage of the situation."