[Reader-list] [SPAM detected Spam-Test: True ; 6.6 / 5.0] COMMON MAN'S CONCERN: PRISE RISE

Bipin aliens at dataone.in
Sat Feb 20 23:29:24 IST 2010


During my... interactions with the Central Government, I raised two very
important aspects ... Price Rise and Internal Security. I personally and
very strongly feel these two should be on top in any Central Government's
priority as it has an impact on a common man's life. So I thought today I
will share my views with you through this blog... 

NARENDRA MODI

http://www.narendramodi.in/speeches_textfile/speeches_textfile_detail/86 

Dear Sir,

Hon'ble Prime Minister of India Dr Manmohan Singh Ji, Union Minister of
Agriculture, Consumer Affairs, Food & Public Distribution Shri Sharad Pawar
Ji, my colleague Chief Ministers, Ministers for Food & Civil Supplies from
all our States and Union Territories, and senior officers of the Central and
State Governments, ladies and gentlemen;

I am thankful to the Government of India for convening this meeting of Chief
Ministers to discuss the issue of increase in the prices of essential
commodities and to review the steps taken by the Central Government as well
as the measures taken at the States' level. Quite a few of Government of
India's policies in food and public distribution sector are implemented
through State Governments. Since India is a big and diverse country, it
would be desirable if Central Government takes the views and opinions of
State Governments while evolving measures, both in short, medium or long
term, to address issues like food security and price rise. 

Since last few years, we have observed a pattern in the price rise. First,
we saw rapid increase in the prices of cement, which went up from Rs. 3300
per MT in 2005-06 to Rs. 4300 in 2008-09. Likewise, steel prices increased
from Rs. 26000 per MT in 2005-06 to more than Rs. 46000 per MT in 2008-09.
Despite severe global financial meltdown in mid 2008 and recessionary
conditions around the world, prices of essential commodities in India have
been rising. 
 
Sir, I will like to emphasize the fact that the current food price inflation
as measured and announced by the Government of India is running in to two
digits consistently. Recently, food price inflation has touched close to
20%. The food price inflation shown by the wholesale price index is not the
correct measurement of the price situation faced by a consumer as he pays
much higher price than the wholesaler does. Though the food grain production
in 2008-09 was higher (233.88 million tonnes) than the previous year (230.78
million tonnes), prices of food grains have risen by 40% to 60% over last
one year period. For instance, retail price of wheat (common) has increased
from Rs. 12 to Rs. 16 per Kg while retails price of rice (common) has gone
up from Rs 14 to Rs 18 per Kg. As we all know, coarse grains like Bajri,
Jowar and Maize are staple food of poor families. Surprisingly, prices of
these coarse grains have also increased from Rs 9 to Rs 13 per Kg in last
one year alone. There has been phenomenal rise in the pulse prices by at
least 100% or more. Over last one year sugar, prices have increased from Rs
16 to more than Rs 40 per Kg. Now there is a panic amongst consumers as the
price of essential commodities, one after another, has been rising unabated.
Previously mentioned, situation has been worsening since last few months.
Obviously, steps initiated by the Government have proved to be inadequate
and it would have been better if such a meeting were convened much earlier.

Before coming to the agenda for this meeting, I have a few general initial
comments to make. 
I am surprised to learn that Government of India has attributed price rise
due to ‘adverse' weather and climate changes; ‘cost push' factors like
increase in crude oil prices, diversion of food grains for fuel, hardening
of international prices of food commodities, hike in Minimum Support Price
etc.

Is poor ‘monsoon' a major factor behind such steep rise in the prices of
essential commodities? I do not subscribe to this explanation by Government
of India. There have been more adverse climatic conditions for 3 consecutive
years in this decade during 2000, 2001 and 2002 which had equally adverse
affect on agriculture production with a negative growth rate of 6.3% in
2000-01 and 15.6% in 2002-03. Yet the food inflation was contained within 5%
through better supply side management.
However, there was a spike in crude oil prices during the year 2008, but as
the global financial crisis had set in, prices of crude oil had cooled down
quickly. Therefore, it would be far-fetched to attribute rise in prices of
essential commodities to the high crude oil prices. In fact, essential
commodities prices have been rising since the beginning of 2008 and until
date. 

Food crops might be being used for bio fuel production in Brazil and USA but
there has been negligible diversion of food crops for bio fuels in India.
Therefore, this is hardly a reason for price rise. Hike in Minimum Support
Prices of various crops has been cited as one of the reasons for price rise.
If the rise in Minimum Support Price of paddy has been 16% and about 50% in
the Statutory Minimum Price of Sugar cane during 2009-10, we are unable to
appreciate the economic logic behind 40% to 60% rise in prices of food
grains and more than 150% rise in the prices of sugar. 

Does it mean that prices have been rising due to hoarding? I have carefully
gone through the data published in the agenda item relating to the action
taken by the state governments under the provision of the Essential
Commodities Act and the Prevention of Black Marketing and Maintenance of
Supplies of EC Act. Of 147 cases of detention against black marketers during
2009, 145 cases have been reported by only three states of Tamilnadu,
Gujarat and Orissa. Further, we observe that majority of the raids and
inspections (93%) under the Essential Commodities Act have been taken by
state government of National Democratic Alliance ruled states who are,
perhaps, more concerned and serious about the issue of price rise. 
Coming to the Agenda, I would like to mention the following details.
I. Enhancing Production of Food Crops:
It is easier said that deficiency in rainfall has resulted in the price rise
of essential commodities. However, I will draw the attention of this August
House that as per the report of the Planning Commission, 10% of food grains
get wasted every year. These are preventable post harvest losses of food
grains estimated about 20 million tons annually. Similarly, about 30% of
farm produce is stored under open conditions leading to wastage and distress
sale. I ask, if the Government of India is really concerned that such food
grains getting rotted and wasted could have been provided to the poor and
needy people of this country? Has the Ministry of Finance taken any
initiatives for development of agriculture infrastructure on a large scale
and allocated funds for any such programme? It is the need of the hour that
Government of India should adopt an integrated and holistic approach for
preventing post harvest losses of farm production. 

Farmers should be provided inputs such as seeds and fertilizers at
reasonable prices, while infrastructure like warehousing and cold storage
should be set up to store and preserve the farm produce. Adequate
arrangement for irrigating the fields and an appropriate system for supply
of food grains to the doorsteps of poor and needy people should devised.
Unfortunately, Government system is so fragmented that it cannot take a
coordinated approach for planning such activities and devising appropriate
schemes.

Gujarat is a State, which has devised such a coordinated approach for
improving the agriculture, and it has therefore transformed itself from a
semi-arid region to one achieving very high growth rate of agriculture
production. Gujarat took major initiatives for conserving water and making
its most efficient use through drip irrigation and sprinkler irrigation.
Gujarat Government's efforts during the last four years have helped in
creating lakhs of water harvesting structures such as check dams, bori-bunds
and farm ponds. Coupled with this, Gujarat took initiative for transfer of
knowledge from lab-to-land and conducted mass programme for mobilization of
farmers such as “Krishi Mahotsav” which has substantially improved
extension, delivery and convergence of various schemes of the Government.
Gujarat has taken an integrated approach to improve farm income by focusing
on the convergence of farming, animal husbandry and agro-forestry.
Consequently, growth of agriculture in Gujarat has been more than 9% per
annum for last several years, resulting in the rise in the value of
agriculture production from Rs.13, 659 Crs in 2000-01 to Rs.49, 036 Crs in
2007-08. 

Recently, Hon'ble Prime Minister in one of the speeches has said that States
are not doing enough for improving the agriculture. Respected Prime Minister
ji, I request you not to belittle the farming community as a unit within the
boundaries of the States. As a matter of fact, farmers produce food grains
to meet the food security need of the entire country. Farmers in Gujarat, to
meet the growing needs of food grains have accepted Hon'ble Prime Minister
suggestion to divert the farm land producing cash crops like ‘jeera' and
‘souff' crops for production of wheat. Therefore, I request Hon'ble Prime
Minister to say a few words, which will encourage our farmers to work hard
for meeting the food security needs of this country. 
 
II. Distribution of Imported Pulses at Subsidised rates through public
distribution system
Of all these commodities, the pulses crisis is specific to India. A shortage
of pulse can have devastating long term effects on our national nutritional
standards and life style and is becoming a silent emergency. Indians will
suffer the most if the country does not find a way out of the pulses crisis,
because other societies do not depend as much on pod-bearing plants for
proteins. 
Why did pulses not follow the pattern of wheat, rice and the green
revolution? Pulses in India are traditionally considered a residual crop,
only suited for growth under rain-fed conditions when one cannot grow wheat
or rice. The green revolution saw the country taking big strides in
increasing yields of rice and wheat. Along with this, the government's
procurement policy and strategy helped in the promotion of these cereals.
There have been no great technology breakthroughs in pulses. Equally, no
aggressive plan, commensurate with the crisis, is in place for pulses. 

Many states in our country have a large number of people who are vegetarian.
As far as Gujarat is concerned, a critical factor, which needs to be kept in
mind, is that most of the population in Gujarat is vegetarian in terms of
food habit and the only source of protein for large sections of the
population is through pulses only. Considering the increasing open market
price of pulses mere subsidy of Rs.10/- per kg on all the pulses uniformly
is not enough and I urge the Government of India to supply pulses at
reasonable and fixed rates. 

Further, considering that there would be continuing deficit in domestic
pulse production, in all likelihood, pulse prices may remain high unless
there is fall in the international prices. Since high market prices of
pulses are affecting all sections of the population, a supply level of at
least 1 kg per card per month of toor or moong needs to be given though the
public distribution system to all categories of card holders in Gujarat and
it should be a regular commodity in the food basket of the poor supplied
through public distribution system. I demand that during the course of
today's deliberations Government of India should announce the quantum and
price of pulses that would be provided through public distribution system
outlets.

III. Pubic Distribution System (PDS) related issues (Targeted PDS and
Poverty Estimates):
At present, the Government of India makes allocations of wheat, rice, coarse
grains and sugar because of Planning Commission's poverty estimates of
1993-94 for the total population of Antyodaya and Below Poverty Line card
holders of 21.20 lakh families in Gujarat. There is a substantial divergence
in the poverty estimates of the Planning commission for 2004-05 (18.56 lakh
families in Gujarat) vis-a-vis the poverty estimates of approximately 34.41
lakh families recommended in the recently submitted report of Shri Tendulkar
Committee to the Planning Commission in November 2009. Incidentally, as per
the State Government identification the total card holders under Antyoday
and below poverty line category is 34 lakhs which is in line with the
estimates of poverty made in the Tendulkar Committee report. UPA government
in its last general election manifesto has stated that all poor families
would be entitled by law to 25 Kgs of rice or wheat per month at Rs. 3 per
Kg. Instead of taking an early decision with regard to the recommendations
of Tendulkar committee, Government of India is insisting on Planning
Commission's estimates of poverty for 2004-05, which is on the lower side
and thereby trying to reduce its commitment to supply food grains to poor
families. I ask whether Government of India is serious about Right to Food
law and food security of the poor.

The Government of Gujarat demands that the Central Government's allocation
of all the essential commodities to Antyoday and below poverty line card
holders should be made to the State Government as per card population worked
out by the State Government i.e. 34 lakh cards. I suggest that as far as
food security is concerned, while allocating essential commodities,
Government of India should take into consideration below poverty line cards
with the States. However, it should also be ensured that such allocated
commodities do not go across the borders of the country. 

Recently, Government of India has announced that additional 10 Kg of wheat
and 10 kg of rice will be made available to all card holders (Antyoday,
below and above poverty line) through public distribution system at FCI's
issue price of Rs. 10.80 Per Kg for wheat and Rs. 15.37 per Kg for rice.
Currently, Gujarat government is providing wheat to poor families at Rs. 2
per Kg and rice at Rs. 3 per Kg. and it incurs substantial expenditure of
Rs.100 Crs per annum in subsidizing the same. Now, the situation has been
created that will further hurt poor as they will be asked to pay higher
prices for aforesaid additional quantity of food grains than what they pay
at present. I do not understand how UPA, who has promised food grains to
poor families at the rate of Rs.3 per Kg. in the election manifesto, can
announce such a high price, which makes life of poor more miserable? As a
matter of fact, such additional food grains to the poor families should have
been priced at rates not more than the rates at which Government of India
provides food grains for below poverty line families in the State. 
IV. Streamlining Targeted public distribution system:
Government of Gujarat – Initiative/action: 

In Gujarat, across the length and breadth of the state from coastal areas in
the west to hilly tribal areas in the east we have a well laid out network
of 16,491 fair price shops; 22,951 Kerosene dealers and 192 Godown Centres
having 2.19 lakh MT storage capacity to serve the needs of 8.15 lakh
Antyoday, 25.68 lakh Below Poverty Line and 89.35 lakh Above Poverty Line
ration cards, totaling 123 lakh card holders.

Further, we have started Food Fortification Programme. During last two years
under Antyodaya Anna Yojana, Government of Gujarat is giving fortified Atta
with Iron and Folic Acid instead of wheat. From March, 2010, all Below
Poverty Line card holders along with Antyoday card holders would be supplied
fortified Atta with Iron, Folic Acid and defatted Soya flour to provide
protein and minerals with additional allocation of about Rs. 230 Crs per
annum from the state budget.

The benefits due to food fortification programme are: 

i)Food fortification helps to reduce malnutrition in general, women, and
young children in particular. 

ii)Distribution of fortified atta in lieu of wheat reduces leakage of
subsidized food grains in the open market. 

As far as the strengthening of public distribution system is concerned, the
State Government has taken the following steps.

a)Model fair price shop:
This is an innovative initiative of the Government of Gujarat to transform
Fair Price Shop into a Village Shopping Mall providing non PDS items along
side PDS items including soft drinks, toiletries, confectionaries, mobile
phone, SIM cards and recharge facilities etc. This scheme has been devised
with an objective to make fair price shop more viable. Under this scheme,
fair price shop operator is encouraged to convert his routine fair price
shop into Model fair price shop while State Civil Supply Corporation
facilitates fair price shop owners to avail loan facilities from
nationalized banks. If fair price shop operator gets the loan of Rs.1 lac,
an amount of Rs.15, the Government as subsidy pays 000. This Model fair
price shop scheme concept has improved the viability of the fair price shop
operators and thus the public distribution system as a whole. The risk
aversion of the fair price shop owners has come down and rural beneficiaries
can get the essential commodities and other items at local place at
satisfactory and reasonable rates.

b)Public distribution system Computerization: State Government is in the
process of launching a pilot project for computerization of the public
distribution system operations using E Gram facilities in the villages/
cyber café in towns. This pilot project will integrate the operation of fair
price shop, Civil Supply Godowns, Taluka Supply office and the card holders.
We hope to minimize diversion and leakages while improving operational
efficiencies. However, it is our view that as the computerization of the
public distribution system will result in high levels of saving of subsidy,
the major beneficiary of this would be the Government of India who should
create a funding mechanism for such public distribution system
computerization projects in states. As far as Gujarat is concerned,
digitization of all the ration cards is more or less completed and
application development is underway. 

c)During the drive carried out since April 2008 onwards and until December
2009, 10.01 lakhs bogus ration cards have been detected and cancelled. For
purpose 100% card holders at fair price shops are checked at the time of
distribution of PDS commodities through verification with valid photo
identity cards like EPIC cards, driving license, Government issued Identity
cards etc. 

d)Continuous and regular inspections are carried out at all the levels.

e)Vigilance Committees, including Panchayati Raj representatives, are also
set up as per the guidelines of the Government of India at village; taluka
and districts levels and meetings of these committees are held regularly. 

f)With an objective to make Village Vigilance Committees (VVCs) pro-active,
a training programme is being organized during March-2010, for the members
of VVCs using satellite communication facilities at Bhaskaracharya Institute
for Space Applications and Geo-informatics (BISAG).

g) Government of Gujarat has started distribution of 1 Kg. Iodised Salt per
card @ Rs. 1/Kg. to the antyodaya Anna yojana and below poverty line
beneficiaries.

h)In Gujarat, door step delivery of kerosene to fair price shop is ongoing
and the scheme is under active consideration for other commodities. 
 
V. Sugar:

The current crisis of sugar availability is largely due to lack of good
governance and political will to combat the crisis quickly. In the 3 years
from 2006 to 2008, over 9.5 million tons of sugars were exported. The
average price realization of these exports of raw sugar in the period after
April 2007 was about Rs 11 per Kg. Government did not revise the Statutory
Minimum Price for 2008-09 and kept it at the same level as the previous year
even while the support price for food grains was raised and hence farmers
cut back on acreage of cane resulting in a severe fall in sugar production.
Sugarcane production did not recover even in 2009-10 with acreage remaining
below 2007 levels. The government has been importing sugar for the last two
years at price higher than the unit price of the earlier exports.
Unfortunately, export was made when prices were low and imports have been
made when the prices were high in the international market.

It is pertinent to note that Navsari Agriculture University undertook an
experiment for sugarcane cultivation through micro irrigation. In this
experiment, it was observed that sugarcane production increased by 15 to 22%
while there was up to 40% saving in irrigation water and 50% saving in the
use of fertilizer through fertigation.

On the supply side of sugar, we understand that more than 7 lakh MT of
imported raw sugar belonging to private sugar factories is lying at Mundra &
Kandla ports. Still the prices are rising and consumers are being made to
pay ever increasing prices for sugar. On its part, Government of Gujarat has
exempted all kind of sugar imported or otherwise, from VAT. In this entire
scenario, we are unable to understand as to why the Government of India
should feel and act in a helpless manner. Only very recently, the option to
explore processing of imported raw sugar of private sugar mills through
sugar mills of other States in the country has been taken up by Government
of India. Currently, the sugarcane crushing season is in progress in the
State and it will last uptil April –May 2010. Sugar mills in Gujarat have
adequate quantity of sugarcane for crushing. Still four sugar mills in
Gujarat have expressed their willingness to process imported raw sugar to
the extent of 35000 MT. I suggest that mechanism for processing of such
imported raw sugar belonging to private sugar mills should be finalized
quickly through consultation with all concerned parties. 

Currently, government provides sugar through public distribution system to
Antyodaya and below poverty line families. However, in view of high prices
of sugar, it would be desirable to provide some relief to above poverty line
card holders also by providing additional quantity under levy sugar scheme.
Thus for the universal coverage through Targeted public distribution system,
additional annual sugar requirement of the State at the rate of 1 kg per
above poverty line card works out to around 1.08 lakh MT. I demand that
Government of India should provide additional sugar of 1.08 MT to Gujarat.
 
VI. Edible oil:

The Government of Gujarat distributes refined, bleached and deodorized
Palmolein oil to Antyodaya Anna yojana and below poverty line card holders
during festive season at subsidized rates every year irrespective of the
scheme of Government of India. During 2008-09, Government of Gujarat
procured 6000 MT of refined, bleached and deodorized palmolein oil and
started distribution in June-08 to the below poverty line and Antyodaya Anna
yojana card holders at subsidized rates without any subsidy given by
Government of India. Further, during 2008-09 additional quantity of 14,000
M.T. of refined, bleached and deodorized palmolein oil was purchased under
Government of India's scheme from the Central PSU designated for the State
Government. The experience of the State Government while purchasing
subsidized oil from the Central PSU was not satisfactory. In spite of the
clear communication from Government of Gujarat, Central PSU imported the
entire quantity equivalent to 4 months of allotment by Government of India
in one go. If Central PSU had contracted for imports in phased manner, the
advantage of declining prices of refined, bleached and deodorized Palmolien
Oil in international markets would have accrued to the State. In the
process, the landed cost in 1 litre pouch was higher to the State Government
by Rs.15 per kg. as compared to other States to whom (Refined, bleached and
deodorized) refined, bleached and deodorized Palmolein oil was supplied by
other Central PSUs. As a result, the State Government had to further
subsidize and distribute the 14000 M.T. of refined, bleached and deodorized
palmolein by giving away further subsidy of Rs. 24 crores from the State
Budget.
During the current year also, the State Government has already procured 6000
M.T. of refined, bleached and deodorized palmolein oil and this oil has been
distributed at Rs.32 per litre to Antyodaya Anna yojana and below poverty
line card holders during August and September 2009. The State Government
desires to purchase about 3,000 M.T. of refined, bleached and deodorized
palmolien oil per month under the extended subsidy scheme of Government of
India. However, considering the experience of last year, State Government
demands that instead of entrusting the import through a Central PSU, the
designated State Government agency be allowed to import refined, bleached
and deodorized palmolein oil directly from the international market and
supply to the card holders in one litre pouch at a price after adjusting for
the Rs 15 per kg subsidy of the Govt of India. The State Government is
willing to give all the authentication / certification of the quantity
imported by the State Government agency under the scheme and distribution
thereof to the targeted beneficiaries. The extended scheme of the Govt of
India may accordingly be modified to include imports through agencies
designated by the State Government.

VII. Imposition and implementation of stock holding limits in respect of
pulses, edible oils, edible oil seeds, rice, paddy and sugar

Government of Gujarat has always been conscious about maintaining supply of
essential commodities by implementing provisions of the law and various
orders under the Essential Commodities Act. In this regard, I may like to
share following facts:

(a) Steps taken by State Government concerning Pulses. 

•Since 06.08.2007, State Government has enforced stock limit restriction in
respect of Pulses vide Gujarat Pulses (Storage Control) Order, 2007. 
•Stock limits with respect of wholesalers and retailers of pulses are as
under 
Wholesalers ... 1000 Quintal 
Retailers ... 50 Quintal 
In view of Pulses control order, state Government has carried out 8965
inspections and 17,277 Qtl. of pulses amounting Rs.6.9 Crs have been seized.

(b) Steps taken by State Government with regards to Sugar. 
•Since 20.06.09, State Government has enforced Licensing under State Control
Order – Gujarat Essential Articles (Licensing, Control and Stock
Declaration) Order , 1981. 
•Stock holding and turn over limits have been fixed under "Gujarat Sugar
Stock holding and Turn over limits (on recognized dealers) Order, 2009. 
After the Sugar stock holding and control order came in to force in June
2009, state Government has carried out 154 inspections and 28095 Qtls of
sugar amounting Rs.10 Crs have been seized. 

(VII) Enforcement under the provision of EC Act and PBM Act.
Steps taken to prevent hoardings of the essential commodities: 

1.During year 2009, total 25612 inspections were carried out throughout the
State. Essential commodities worth of Rs. 25.38 crores have been seized and
Rs. 5.15 crores has been confiscated. 259 licenses have been suspended and
88 cancelled during the year. Total 82 police case has been registered
against the dealers of the essential commodities. 

2.During year 2009-10 total 46 persons have been detained under Prevention
of Black Marketing of Essential commodities Act. 
 
(a) Suggestions for strengthening Prevention of Black-marketing and
Maintenance of Supplies of Essential Commodities Act, 1980 
i) The period of detention should be increased from 6 months to 12 months
under Section 13 of P.B.M. Act, 1980 
ii ) The period of approval of detention order by State Government should be
increased from 12 days to 15 days under sub-section 3 of Section 3 of P.B.M.
Act, 1980.

(b ) Suggestions for strengthening Essential Commodities Act, 1955. 
(i) Since there is delay in the disposal of cases filed under EC Act,
Government of India should consider setting up of Special Courts for this
purpose. 
(ii) The Appellate powers under 6 (c) under Essential Commodities Act, 1955
has been given to the Judicial Authority since 1998 which was previously
with the State Government. This should be restored to the State Government
for speedy disposal of the cases. 

(IX) Other Suggestions:
(a) Ensuring Food Security: The current situation of helplessness that the
Government of India finds itself in should prompt some soul searching among
those who advocate that market mechanisms and free trade across borders will
take care of India's food security. It is perhaps time to rekindle the
debate on the need for near self sufficiency in essential foods and
investment in food storage infrastructure. For this purpose, in addition to
giving various subsidies on fertilizers, seeds, electricity and waiver of
interest on farming loans to farmers, we may think of fixing minimum support
prices for five years so that farmers are assured of minimum return on farm
yields for longer period and are encouraged to produce crops such as
oilseeds and pulses where India has become a net importer.

(b) Wasteland development for increasing agriculture production: Couple of
years ago, Government of India had set up a committee headed by me to
recommend measures for utilization of waste lands in the country. Our
committee has already submitted its report to the Government of India. So
far I have not heard about any action taken on the recommendations of this
Committee. I will suggest Government of India should undertake development
of large tracts of waste lands in the Private Public Partnership mode. Such
waste lands, thus brought under cultivation will not only help in improving
the agriculture production but also provide large scale employment to the
rural people. I will strongly recommend that Government of India should
consider this suggestion and devise an appropriate scheme for development of
waste lands in the country. I will also like to mention that Gujarat is the
first State of the country to get 21 rivers into a grid and start
grid-cum-canal network successfully to become a role model for national
approach for interlinking of rivers. It is high time that Government of
India should take lead in implementing such an initiative across this
country. 

(c) Likewise Reserve Bank of India which regulates money supply through
regular adjustments in the Cash Reserve Ratio (CRR), Statutory Liquidity
Ratio (SLR), Repo and Reverse Repo Rates etc., Government of India should
develop a system to constantly monitor the availability and prices of
essential commodities in an appropriate price band and in the event of such
price band being exceeded, Government of India should start maintaining
minimum stocks of such essential commodities for its release through public
distribution system at affordable prices. This will go a long way in
improving Government's effectiveness, both in terms of prices and timing for
commodity price stabilization and market intervention. Further, Government
of India must create buffer stock of sugar and pulses. In addition, the
concession to importers benefited the importers only and not the public.
There should be some inbuilt mechanism in the policy that Government
concession actually percolates to the public. 

(e) During shortage of particular commodity, State Government is given power
to import essential commodities directly from the international market and
central subsidy be paid to the State Governments on such imports. (At
present only designated central PSUs are only allowed to import and
distribute commodities across the country at subsidized rates).

(f) Government of India expects States to carry out procurement of food
grains but should there be discrimination in the commission rates payable to
private agencies and agencies in the cooperative sector? During the Rabi
Marketing Season 09-10, the commission rate finally approved by the Govt of
India to the intermediate cooperative societies was only 1%. In contrast,
the adatiyas in some other states were allowed a commission of 2.5%. It is
very difficult to understand how cooperative agencies, which are the main
agency in Gujarat for such activities, can be allowed a lower rate of
commission as compared to private traders. I hope the Govt of India will
correct the anomaly urgently otherwise, this will have an adverse impact on
further procurement operations in Gujarat.

                                                        Jai Hind, Jai
Bharat!




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