Price rise: Cong fixing blame on states

Worried about the impact of the unrelenting price rise ahead of Assembly elections in Maharashtra and Haryana, a defensive Congress party is now trying to fix the blame on the state governments.

As the prices of grocery items, especially pulses, have hit the sky, Congress spokesperson Abhishek Manu Singhvi today said: “The primary responsibility lies with the state governments to control prices.” He suggested that the states had been given power and have to take action against hoarders and black marketers.

At the same time, Singhvi didn’t deny the high prices prevailing in the market and also said the speculative trading in the futures market had also contributed to the price rise. “The speculative trading also has a role to play in the current situation,” Singhvi said in a press conference. That the Congress is worried about the price situation was evident when Janardhan Dwivedi, a Congress general secretary considered close to Sonia Gandhi, today said: “The situation is serious. There should be a long-term planning for alternative crops.”

While the Congress tries to put the onus on the states, it couldn’t justify how prices in states like Delhi — where the party is in power — are exorbitant in the retail market. In fact, in a veiled criticism of the Sheila Dikshit administration in Delhi, Singhvi today cited the example of Delhi to show “something is wrong somewhere”.

“In Delhi, the price difference between the mandi (wholesale market) and the retail market is three to five times more. There is simply no reason why the price in a same city should vary so much,” the Congress spokesperson said.

While the Congress is trying to point fingers at the states, this is perhaps the first time it also admits the Opposition’s charge that speculative trading is also responsible. The Opposition, especially the Left parties, are relentlessly attacking the government for allowing speculative trading in futures market. “The business in the commodity exchanges has increased three-fold in June 2009 compared to June 2008. This shows that a section of traders are eyeing abnormal profit in the futures market and so they are investing so much,” CPI(M) politburo member Sitaram Yechury told reporters recently.

Finance Minister Pranab Mukherjee too, recently stated that the legal powers to crack down on hoarders and black marketers had been returned to the states after the UPA came to power in 2004. “But many states have not taken any action against the hoarders.”

Congress managers fear that with deficient rains and lesser crop production, the prices might soar further in the coming days. The party will be facing Assembly elections in Maharashtra and Haryana in October.