The Telegraph
Since 1st March, 1999
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Fight-hoarding tips to states

New Delhi, June 24: The Centre will shortly issue an “advisory” to states to scrupulously enforce laws against hoarding of food commodities, including vegetables and fruits, and look at other ways to crack down on hoarders and those indulging in “forward trading” to rein in prices.

The framing and enforcement of the laws against hoarding and blackmarketing are completely within the jurisdiction of the states. The Centre can, at best, only offer directives and advisories.

Government sources said these decisions, taken at the meeting of the cabinet committee on prices on June 22, will be implemented shortly under the “watchful” eyes of Prime Minister Manmohan Singh, finance minister P. Chidambaram and defence minister Pranab Mukherjee.

The Delhi government took the lead today when chief minister Sheila Dixit warned she might invoke the Essential Services Maintenance Act (Esma) to check the soaring prices of cereals, pulses, vegetables and fruits in the capital.

Sources said other Congress-ruled states have agreed to follow suit soon.

Maharashtra remains the only area of “concern” because the government is unsure how ally Nationalist Congress Party would react. Agriculture minister Sharad Pawar is reportedly upset that he was projected as the “fall guy” in the food crisis.

Sheila said her team would watch what impact the Centre’s decision to import wheat and sugar would have on the local market.

“After that we will see whether Esma needs to be invoked against traders who may be hoarding vegetables and essential commodities,” she said.

The Himachal Pradesh government, also of the Congress, has indicated it will soon amend the anti-hoarding laws that were relaxed by the BJP.

As with the decision not to levy sales tax on enhanced petrol and diesel prices in order to blunt the Left and the NDA’s push for a rollback, the government hoped the “advisory” could help them score brownie points, this time against the BJP. Sources said BJP-ruled states would be “reluctant” to come down on the traders who form one of its core constituencies.

The sources also said the finance ministry was looking into ways of curtailing forward trading (akin to speculating in stocks and shares and property-buying). Their feedback was forward trading, a spin-off of the liberalisation policy, was largely responsible for the soaring prices.

“In the licence and permit era, traders could hoard only this much of any commodity and no more. The absence of free inter-state movement of goods and produces checked unbridled storage of foodgrain. All this is a thing of the past,” a source said.

The sources conceded a law to abolish this form of trading was the only answer. But the Centre does not want to be seen as reverting to the “quota permit” days.

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