Trader cartels to be blamed for high onion prices: Basu

Top economic advisor in the finance ministry today blamed cartels among traders for the skyrocketing prices of onion. 

"There are forms of implicit cartels working among the traders that block the movement of new entry, the appearance of new players," Chief Economic Advisor Kaushik Basu said while explaining the reasons behind the onion price rise.

The price of the vegetable, which is ruling at Rs 60 per kg, went up to Rs 80 per kg last fortnight.

He wondered why traders are not buying onions from villages and selling them in cities to equalise the huge price differential between the two areas.

"One important question (that) arises (is) why the profit making traders are not buying (onions) from villages and selling in cities to equalise this huge price difference between the two," Basu said the Skoch Summit here.

He said that rise in onion prices is not really a matter of monetary or fiscal policy.

"It is much more to do with product supply, supply chain in particular when you get such a high price differential between retail outlet in cities like Delhi and farm gate prices," Basu added.