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India targets hoarders to wrestle down inflation PDF Print E-mail
Saturday, 19 April 2008

India’s government, battling to wrestle down soaring inflation, vowed stiff action yesterday against food hoarders and accused industry of forming cartels that have driven up prices, reports AFP.

The Congress party-led government is seeking to cut inflation running at over three-year highs of 7.41 percent with national polls looming within a year. Inflation is seen as hitting the poor masses—the Congress party’s biggest supporters—hardest.

Finance Minister Palaniappan Chidambaram told parliament the government, which has already slashed food duties and banned exports of pulses and other foods, would not hesitate to further “sacrifice revenues to control prices.”

The government could take “fiscal steps, monetary steps and supply- side measures” to tame prices in Asia’s third-largest economy, he said.

But the government was fighting a worldwide phenomenon with prices of commodities such as wheat, rice, cooking oils and metals marching higher globally, he said.

“Inflation is mainly triggered by international prices,” he told parliament, where the government has faced fierce criticism over the rising cost of living. “This inflation is reflected in all the international markets.”

The World Bank this week calculated that global food prices have risen 83 percent over the past three years.

At the same time, Chidambaram said India’s states needed to maintain adequate food stocks and prosecute hoarders who were speculating. Also he accused cement and steel manufacturers of “behaving like a cartel,” without giving details. “We have to break this logjam,” Chidambaram said, warning of “tough measures... if their behavior does not change.”

He added that controlling inflation would take its toll on India’s strong economic growth, warning that: “You cannot have both.”

The government has already said it is prepared to sacrifice some degree of growth in order to bring down inflation in the country of more than 1.1 billion where poor families can spend most of their household income on food.

The statements came as India’s Reserve Bank Governor Y.V. Reddy said the level of inflation was unacceptable and he would “make an announcement” at the bank’s next policy meeting on April 29 on reining in prices.

Another report adds: Cutting across party lines, members in Lok Sabha asked the government to compensate farmers whose standing crops have been damaged due to unseasonal rains and hailstorms in various states, report agencies.

Raising the matter during Zero Hour, CPI(M) member K S Manoj and his party colleagues demanded immediate release of central assistance for farmers in Kerala where “unprecedented rainfall” has caused extensive damage to the standing crop.

Maintaining that the damage was estimated to be worth Rs 161 crore, he said a central team had already assessed the loss but no aid has been sent to the state so far. Congress member Madhusudan Mistry said the Gujarat government had not granted any compensation to farmers whose crops had suffered damage to recent hailstorms.

Even houses and settlements of farmers had been damaged, he said.

While his remarks about the BJP government in the state drew protests from opposition party members, Mistry sought central assistance for the affected farmers of north Gujarat.
BJP’s Rasa Singh Rawat said standing crop in Rajasthan had also suffered due to hailstorms and wanted changes in the rules of the Calamity Relief Fund to provide expeditious succour to the affected.
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