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| Pranab blames poor mgmt by states for price rise |
| Press Trust Of India / New Delhi Nov 27, 2009, 01:19 IST |
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Expressing concern over rising prices of essential commodities, the Centre today blamed some states for poor management that has resulted in shortage of some of these items.
Citing an example of the poor management, Finance Minister Pranab Mukherjee said in the Lok Sabha, “...In one state I found, because of overgrowth of potato production, they could not buy it, there was not adequate storing facility, it was simply dumped on the street.”
Intervening on a discussion on price rise of essential items, Mukherjee said when prices of potatoes increase, when prices of vegetables increase, blame cannot be squarely put on the finance minister or agriculture minister.
“Surely, it is bad management (of some states),” he said. He said, “We are deeply concerned. When the prices go high, when the people suffer, when essential commodities are not available, definitely people will not feel happy, they will feel angry, they will feel frustrated, that will get reflected in the voices of representatives of the people.”
The finance minister's remarks assume importance as food inflation stands at 15.58 per cent during the second week of this month. Prices of potatoes, in fact, have more than doubled in one year.
The finance minister sought states' cooperation to deal with the situation, saying there is still a huge gap between what farmers get and prices in the market. “If we do it collectively together we will be able to deliver the goods,” he said.
Mukherjee said the Centre alone could not be expected to handle this situation as part of the responsibility lies with the states. He said the Centre would perform functions like monetary policy, fiscal policy, export and imports, which fall under it.
The Centre has banned export of all items, including wheat and non-basmati rice, that are in short supply, he said, adding that even basmati rice and onions have a minimum export price of $900 and over $400 a tonne, respectively.
“What is to be done by the state governments, they have to do it,” Mukherjee said, while seeking cooperation of states in handling price situation. He said the Centre wanted to give remunerative prices to farmers, but states would also have to share their responsibility in this regard. “We want to give farmers more prices. Because, I know there is still huge mismatch. From the fields to the markets, but who is to do it? If you expect it to be done centrally, I am afraid, in our democracy, in our cooperative federalism, it is not possible.”
Mukherjee said he did not subscribe to the philosophy that higher growth was not required, but the poor would also be taken care of. The finance minister said the government had not increased the issue prices of sugar, kerosene and rice since 2001 for the poor.
“But, who is to distribute it? (Agriculture and Minister Food Minister) Sharad Pawar? It is primarily the responsibility of states,” he added. Cooperative federalism is not confined to just sharing taxes alone, Mukherjee said. It also implies responsibilities to be borne collectively by the states and the Centre. To a query by some members on why India is not going for only the consumer price index, Mukherjee said there were still 26 countries in the world that used both retail and wholesale price indices.
He said usually consumer price indices and wholesale price indices converged in seven to eight months, but it as not happening this time because of “some reasons”.
Experts are examining the reasons, he said. While wholesale price inflation stood at 1.34 per cent in October, the rate of price rise based on retail prices of items consumed by agriculture and rural labours stood at over 13 per cent in the same month.
He said the recovery in exports depended on revival in demand in some developed countries.
“It (recovery in developed world) is gradually coming, but it is not robust.”
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