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Price war amid mischief theory

New Delhi, June 22: The Centre today announced steps to rein in food prices, scrambling amid whispers of divisions within the cabinet to address an issue that could gift the Opposition a potent weapon.

The government has banned export of pulses and allowed cap-free import of wheat, pulses and sugar by private traders.

The export of pulses has been suspended till Diwali, which falls in October. Wheat imports will be allowed till the next rabi season and sugar till September when the new crop is expected.

Agriculture minister Sharad Pawar had earlier said wheat, pulses and sugar would not attract customs duty, though sugar importers would have to pay countervailing duty.

Subsequently, he clarified that wheat imports would be permitted until December 31 and the duty would be announced in the next few days.

Food prices have been inching up in many states, but the rise has been more pronounced in northern India.

“Wheat, pulses and sugar are driving prices up. Therefore, the decision has been taken to augment the supply side (through imports),” finance minister P. Chidambaram said after the cabinet meeting.

The cabinet discussions were followed by a longer meeting between Chidambaram and Pawar, apparently to sort out differences. Pawar’s stand at the cabinet meeting has sowed seeds of suspicion among Congress leaders.

The agriculture minister, whose party recently snubbed the Congress and ensured that Rahul Bajaj made it to the Rajya Sabha, is learnt to have argued for the export of sugar and pulses.

He also opposed the import of sugar, contending that its domestic price is the lowest on the international index. But he was overruled by his cabinet colleagues.

Until yesterday, government sources said, he was also supporting a proposal to curtail the quantum of wheat supplied through the public distribution system to those living below the poverty line.

The agriculture minister’s contention was that much of the wheat was not picked up over the last three years in the states that have the largest number of wheat consumers.

But it was conveyed to Pawar that neither the Congress nor the Left would entertain any proposal that hinted at a dismantling of the PDS.

With the wound of the Rajya Sabha election still raw, Congress leaders have gone to the extent of suggesting a “deeper gameplan” to “malign” the central coalition.

“Pawar’s ministry is directly responsible for the systemic flaws but people blame us, mock our aam admi slogan. The Prime Minister is being faulted for not being able to control matters despite being an economist. It is made out as though the Congress president only indulges in rhetoric not matched by ground realities,” a senior Congress leader said.

The Opposition BJP today tried to capitalise on the perceived divisions, picking on Pawar and saying that the “artificial crisis is manufactured by the UPA government”.

The BJP has also vowed to step up its agitation against price rise.

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