Bhubaneswar/Cuttack, April 9: Traders today launched an indefinite strike and stopped procuring wheat, pulses, and wheat products, demanding withdrawal of 5 per cent value added tax (VAT) from these products.

The state government has appealed to the traders to call off their strike keeping the larger interest of consumers in mind.

Efforts to break the deadlock failed, as both the sides remained adamant. The finance department sought three-month time to examine the demands for withdrawal of VAT from these commodities and introduce a 1 per cent entry tax instead. The traders demanded that VAT should be withdrawn immediately on an experimental basis for six months.
Food and consumer welfare minister Sanjay Kumar Das Burma said the commodities’ price remained stable. “There is no reason for the consumers to panic,” Das Burma said.

The minister also appealed to the traders to call off their strike. “They should not harass the consumers,” he said.
Odisha Byabasayee Mahasangh secretary Sudhakar Panda said the traders had stopped issuing waybills to procure these commodities from other states from April 6. “The impact will be felt within a couple of days, and the situation will be acute after five days,” Panda said. 

“Our demands are genuine. The government should consider them with sympathy,” Panda said.

The ongoing standoff between the traders’ associations and the government started to influence commodities’ prices in the retail markets. Small traders and consumers have resorted to panic buying due to the situation. Though the prices of maida (refined flour), suji (semolina) and chana dal (Bengal gram) have not changed, there has already been a hike in the flour and arhad dal (split red gram) prices.

Sources said arhad dal was now being sold at a retail price of Rs 95 per kg against a price of Rs 90 per kg that was there couple of days ago. Besides, besan (gram flour) is now available at Rs 56 against the price of Rs 50 per kg last week.

“There has already been a hike of Re 1 in flour and Rs 5 in arhad dal prices. The price rise will indeed affect the middle-class families,” said Sujata Pradhan, a homemaker.
“The stalemate will create an artificial scarcity of other food items that will lead to another price rise in the next couple of days,” said Buxi Bazar resident Dilip Swain.

The traders in Malgodown, the largest wholesale market in the state, have stopped procurement of these items 
following the mahasangh’s decision. 

A Malgodown trader said: “We are compelled to stop the procurement, as the government earlier assured us of withdrawing the VAT when we had resorted to a two-day strike last December.”

Sources said the stock at Malgodown would be enough to carry on for the next three days only, as the traders have stopped booking fresh stock.

Cuttack Chamber of Commerce joint secretary Srikant Sahoo said: “The VAT is not levied on wheat, pulses and wheat products in nearly 24 states. The state government has failed to generate revenue as some traders are smuggling pulses, wheat and wheat products from neighbouring states where no VAT is being levied.”