FM warns of action against cement and steel ‘cartels’

The Congress-led UPA Government is under pressure because of rising Inflation that has fueled a political backlash, with not just Opposition members, but also its Left allies, who walked out of the Lok Sabha today.

At a discussion on price rise in Lok Sabha, Chidambaram said cement and steel manufacturers were acting like cartels and exploiting consumers. Referring to the rise in the prices of metals and agricultural commodities such as wheat, rice and edible oils, in the international markets, Chidambaram said, “When we import commodities, we are actually importing inflation.”

Replying in the same discussion a little later, Agriculture Minister Sharad Pawar announced the government’s decision to import 1 million tonnes of edible Oil that would be supplied to states at a subsidy of Rs 15 per litre, particularly for the Below Poverty Line and Antodaya families.

Exhorting states to act against hoarders and black marketers, the finance minister said states must invoke the powers under the Essential Services and Maintenance Act (ESMA). They can impose severe stock limits, and also raid prosecute hoarders who stock more than the prescribed limit. “If I have the power, I will do it tomorrow,” he said.

In his reply, Pawar said the rise in wheat and rice prices was much lower in India when compared with the world. While rice prices rose 17.6% in India in the past year, even a rice-exporting country such as Thailand saw a 131% jump. Similarly, wheat prices increased 7.21% in India while they vaulted 115% internationally.

While rice and wheat are the lowest priced in India, Pawar said, the people were not in a position to accept even these. Stating that the budgetary provisions for agriculture had consistently improved during the UPA regime, he said the overall agricultural production was improving. “Our overall approach is to increase productivity. Unless we increase production, these issues can’t be resolved,” he said.

Regarding the Forward Markets Commission (FMC), the regulator for commodities derivatives, and the futures...