At the backdrop of a threatening by CPI (M) to launch nationwide agitation by April 15, if the UPA government fails to check spiralling prices, the cabinet committee on prices has decided to meet on Monday to discuss and carved out serious measures to curb inflation.
A meeting of the Committee on Prices regularly meets in a week or in a fortnight, and has decided to meet on Monday as its regular course to take stock of the current price line and the situation arising out of surging prices, particularly of some food and metal items.
However, the government has taken several measures but those have not been succeeded in checking spiralling prices. The UPA government made it amply clear that all fiscal and monetary steps will be taken to limit the spiralling prices. Few days back incentives on export of at least 40 items comprising steel, cement, and non-basmati rice were pulled out. The Reserve Bank has also committed to keep inflation under five per cent.
Within few weeks the inflation rate has surged to 6.68 percent for the week ended March 15, which is the highest in 13 months. While a week ago it was below 6 percent to 5.92. The recent growths in prices are outcome of the costlier food items like vegetables and mustard oil and metal products like joist and rolls and bright bars.
On Friday the Commerce Minister Kamal Nath said though his government had withdrawn incentives on few items including non-basmati rice, but now it was considering on a proposal to ban export of non-basmati rice. Metal and food prices are responsible for the inflation to over a year high so we are also in the process of stamp out of import duty on steel, he added.
While Cabinet Committee on Prices (CCP) in order to control rolling prices might suggest to take fiscal or quantitative steps while the Reserve Bank on the other hand may squeeze money supply even at the expense of some growth, if high inflation continues.
"The government is determined to take all steps fiscal, monetary and supply side to moderate inflation and if that means we have to live with slightly lesser growth, so be it," opined the Finance Minister P Chidambaram.
At the 19th party CPI (M) congress conclave held in Coimbatore, Tamil Nadu, the party unanimously adopted a resolution to wage a nationwide agitation by April 15, if and only if the UPA government fails to take steps to bring down the spiralling prices of essential commodities.
If the government fails to act on these demands by April 15, we will consult several parties within the ruling side and also the like-minded parties outside the government and launch a nation-wide agitation against the government, said Sitaram Yechury, the Politburo member.
The general secretary of the CPI (M) Prakash Karat suggested the UPA government to take immediate steps like cut in food grain allocations to States under the Public Distribution System (PDS), the universalising PDS, 15 essential commodities like pulses, edible oil and sugar be included in PDS, future trading in 25 agricultural items be banned, retail prices of petrol and diesel be reduced and most of deal with stringent action against hoarders and black marketers.
Tight rope walk for Congress-led UPA government
For the government it has to deal with the dual task. While the government has to take steps to check the spiralling price rises, on the other hand it has to ensure the economic growth must not hampered. The cautious and delayed steps of the Congress led UPA government has already supplied enough ammunitions to Oppositions including its allies Left parties to attack the Congress.
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