People's pulse - Delhi

Published : Apr 25, 2008 00:00 IST

BIG industrial houses that have entered the retail sector are mainly responsible for the rising inflation rate, but it is ironical that the government blames only the small trader and does not take action against the big fish, says Praveen Khandelwal, secretary general of the Confederation of All India Traders, an umbrella organisation of 5,000 associations of traders from all over India, including retailers and wholesalers.

Why is the government not taking a look at how much raw material they are procuring directly from the source and how that is causing artificial scarcity in the market, resulting in rising prices? Why is it that despite so much hue and cry about rising prices of essential commodities, not a single big industrial house has been booked under any anti-hoarding law? he asks.

He is emphatic that the price-control measures announced by the government, such as the withdrawal or cut in import duties, benefit big business most, but the benefits are not passed on to the people.

He accuses big business of speculative trading in essential commodities. Since they have huge stocks, they indulge in speculative trading, and since the entire trading is speculative the actual commodity does not reach the market, prices go up, he says.

The confederation has drawn the governments attention to this problem but without success, says Khandelwal. The confederation demanded a ban on forward trading, especially on essential commodities, for prices to stabilise.

It has never been so steep and never so bad, says Sunita Malik, proprietor of the departmental store SuperMart in the upmarket Kaushambi area of the National Capital Region of Delhi. Our profit margin at best always hovered around 5 per cent, but now even that has been eroded and it is becoming difficult to survive in the market now, she says.

C.C. Pillai, acting president of the Confederation of Central Government Employees and Workers, holds the government responsible for the rising prices because it is not taking corrective steps. The confederation is unhappy about the Sixth Pay Commission recommendations and is planning a nationwide stir.

According to the confederations office-bearers, the paltry increase in the salaries of grade C and D employees is like rubbing salt into their wounds. While the cost of living has gone up, the government has handed them a raw deal, they say.

Once you become dependent on imports you become a hostage to global trends and this is precisely what is happening now, says social scientist Shaibal Gupta of the Asian Development Research Institute. He blames the government squarely for the sorry state of affairs.

You do not give remunerative prices to farmers, so they sell their produce to private players at better rates. Then you import essential commodities at higher rates. Obviously, all this leads to inflation, he says. He sees no immediate improvement because the biggest champion of free market is heading the Planning Commission.

What is ironical, he says, is that instead of taking sincere measures to curb inflation, the government is still busy giving sops: tax sops, loan waivers and huge pay hikes.

Purnima S. Tripathi
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