Price Control mechanism has to bee relooked

(Dr. krishan Bir Chaudhary)

There is a vast mechanism in the country to check any volatility or abnormal rise in prices of essential commodities. Despite expending millions and billions of rupees to run the price controls machinery at the Central and States level, this mechanism has been rendered ineffective and counter productive. The present surge in prices of essential commodities and vegetables of common use have gone out of hand .The government machinery has lost its effectiveness to bring the situation under control.

The Government has made an arrangement to monitor daily and weekly prices of 17 essential commodities all across the country. Its main purpose is to check demand and supply situation and find balance if there is any problem in the country. The government undertakes short term measures like import and export to control augment supplies, so that common man is saved from price rise.

There is a special cell in the economic division of finance ministry for this purpose. A group of ministers has been setup to take necessary action on situation of price rise and to suggest measures. The group recently took decision to release additional quotas of Wheat and Rice to states and extent ban on export of Pulses .

It is worth mentioning that on the recommendation of this Group of Ministers, the government of India on 7th Sept., 2010 had allotted 25 lack tones extra food grains to states. Off takes by the state governments from this allotted quantity was only six percent by 9th Nov., 2010. This implies that states have enough food grain for BPL families.

A committee of secretaries under the chairmanship of cabinet secretary, the strongest committee on prices is also there, to save common man from abnormal price rise.

Many times has been noticed that the government machinery awakes only when the situation had gone out of control. Sugar market's volatility and recent surge of Onion prices are fresh examples of lack of efficiency of the present mechanism for price monitoring and control.

The issue of price rise has discussed nine times in the Parliament since 2004, three times in 2006. The Reserve Bank of India on its part has been under taken steps to control money supply to curve inflationary pressure. The Central Government advise the State Governments to take effective action to check hoardings and black marketing under Essential Commodities Act 1955 and Prevention of Black Marketing Act 1988.

There is always a crisis on the price front, some times commodity 'A' troubles the common man , another times commodity 'B' or 'C' . People are loosing faith in the system. It is visible that neither short term, nor long term measures are working to control the price rise, unscrupulous hoarders and profiteers are exploiting the situation. Many times have seen that the hoarders creates artificial crisis in the market. Common men and poor farm producers are real looser.

The situation will improve only if government makes effective use of its power to reduce the gap between the prices at which farmers sell their produces and the prices at which the consumer buy the products at retail shops. If the government has will-power, can find the way surely.


(Editorial : Kisan Ki Awaaz Magazine)