[Marxistindia] PB statement on price rise

[news from the cpi(m)]

                                                        January 15, 2010


Press Statement


The Polit Bureau of the Communist Party of India (Marxist) has issued
the following statement:


                 REVERSE POLICIES TO CONTROL PRICE-RISE


The Polit Bureau of the CPI (M) notes with grave concern that the WPI
inflation rate climbed to 7.31% in December 2009 and inflation in food
articles remained very high at 17.28% in the week ending 2ndJanuary
2010. The retail price of sugar has reached an unprecedented high of 50
rupees a kilo. Prices of cereals, pulses, vegetables and milk continue
to rise. This reflects the utter failure of the Congress led Government
in checking food prices and inflation.


The recent note issued by the Cabinet Committee on Prices shows that the
Central Government wants to shirk its own responsibility by blaming the
States. Without a proper assessment of the causes behind the relentless
increase in food prices, effective measures cannot be undertaken. For
example, one of the reasons for high sugar prices is the failure of the
Central Government to build a sugar buffer stock. Instead the Government
incentivised exports helping big traders and sugar mill owners. Sugar
imports with a slew of concessions to importers since early last year
have not resulted in lowering the retail price of sugar. Only the
traders and big companies have profited, Some of the trading corporates
have reported profits from 150 to 300 per cent. The Cabinet note does
not address these issues but instead blames the States. In fact all the
three Left led State Governments have removed VAT on sugar as have many
others.


The Central Government’s faulty approach is evident in the decision to
release buffer stocks of foodgrains in the open market rather than to
provide it to State Governments at subsidized rates as a measure to
restore the earlier cuts in allocations to APL sections. The issue price
of so-called additional allocations of foodgrains being offered to State
Governments is double the price of the earlier APL allocations. For
example in Kerala the issue price of rice for APL allocations was
Rs.8.90 per kilo. The monthly allocation of 1.13 lakh tonnes was slashed
to just 17,000 tonnes. Now the additional foodgrains offered by the
central Government is at Rs. 17 a kilo. Such is the hypocrisy of the
Central Government on price rise!


Further, the threats being issued to State Governments that they will be
bypassed and Central agencies like NAFED and NCCF will directly provide
subsidized foodgrains, edible oil and pulses to consumers in the States
is highly objectionable. This goes against the federal character of the
Constitution. Besides it is common knowledge that these agencies have
failed to deliver even on their present responsibilities given their
limited outlets.


Even the homily to the State Governments to undertake dehoarding
operations sound hollow when it is the Central Government which has
liberalized inter-State movement of foodgrains and relaxed stockholding
norms for private traders and corporates. At the same time speculative
capital in the futures market continues to play havoc with commodity
prices. Shockingly, in spite of continuing high prices in wheat, the
earlier ban on future trading in wheat was lifted by the Central
Government. Only Central Government can reissue the ban. Individual
State Governments cannot make a dent on inflation through isolated
actions in the neoliberal policy environment created by the Central
Government. The Central Government follows policies which help hoarders
and speculators and then blames State Governments for not taking action.
Indeed it is the contradictory statements of different Central Ministers
which are fuelling inflationary expectations.


The CPI (M) demands that the UPA Government take the following immediate
steps in order to reign in food price inflation:

 

     i. The Government must release cereal stocks through the PDS by
        increasing the rice and wheat quotas for the States. The Food
        Security legislation should be tabled without any further delay.
        
    ii. The Government must supply sugar, pulses and edible oils through
        PDS outlets at cheap rates.
        
   iii. Futures trading in all food articles must be immediately banned.
        
    iv. The Government, in coordination with the State Governments, must
        launch a countrywide crackdown against hoarding and
        black-marketing. All private traders of food articles must
        disclose their stocks and release surplus stocks.
        
     v. Diesel and petrol prices must be brought down by cutting
        indirect taxes. 
        


The Polit Bureau of the CPI (M) calls upon all its units to intensify
the ongoing struggle against price rise till the Congress led Government
initiates these steps in the coming days.


                                                       (Hari Singh Kang)

                                     for CPI(M) Central Committee office