Centre tells states to prevent hoarding

Wants laws used to full extent to curb inflation; Modi's 2011 report on this being read by food dept for next steps

As controlling food inflation is on of the top agenda of the Narendra Modi government, the department of consumer affairs (DCA) has issued a missive to all state governments to ensure food items are not hoarded in anticipation of a bad monsoon. Food price inflation rose from 9.1 per cent in March to 9.66 per cent in April.

The department wants states to strictly implement the Prevention of Black Marketing and Maintenance of Essential Services Act in this respect.

Work has also started in the ministries of agriculture, food and animal husbandry to take effective steps to bring down food price inflation. The work will  take into account a report from a panel headed at the time by Narendra Modi himself, as then chief minister of Gujarat, to the central government in 2011, an official said.  

Modi had made 20 recommendations, with 64 detailed actionable points. These included revamping the Agriculture Price Marketing Committee Act, evolving a single national agriculture market and enlarging the scope of priority sector lending. The report, ignored by the then government, has been revived after the Bharatiya Janata Party came to power.

The BJP manifesto promises to bring down inflation by putting in place strict measures and special courts to stop hoarding and black marketing.

DCA is also in the process of making its Price Monitoring Cell more effective, an official said.

Earlier in the week, new food and consumer affairs minister Ram Vilas Paswan and his deputy, Raosaheb Dadarao Danve, had said their top priorities were to contain the price rise in food items, improve the Public Distribution System and create adequate storage for foodgrain.

Officials said the ministry was forming a view on keeping essential commodities out of the purview of futures markets, as suggested by Modi's report. It had favoured temporary suspension of essential commodities such as wheat, rice and pulses from futures trade.

“Our experience, too, has shown that happenings in the commodity futures markets are not always healthy and it all depends on how effectively it is dealt with,” the official said.  

On onion prices, which have a tendency to spike after the monsoon season around September and October, officials said the trend in 2014 was expected to be ‘normal’. “Onion prices tend to fall during April and May and rise in October and November. This year, it is not expected to be any different,” the official said.  

He also said the expectations of a below-normal monsoon in 2014 might not have a drastic impact on food prices. “We had a meeting with the Director General of India Meteorological Department and he said, as of now, things are under control,” the official explained.