News Analysis Speculative hoarding causes price-rise

THE recent spurt in the prices of essential commodities which has made the life of common people in India miserable is a new phenomenon. In fact, this trend started only after the entry of the multinational companies in our country. Prior to that prices registered a hike rarely and had never been excessive as it is today.

There are cogent reasons to believe that had the British Businessmen not entered India, the infamous famine of Bengal in the early forties would not have taken place. It can be said in the same vein that had the alien multinationals and the Italian lady Sonia Maino not poked their noses into our internal affairs the present economic crises could not have raised its ugly head to spell disaster here.

The current price-rise in India has compelled a very large number of people living in urban and rural areas both to cut down their meals. Pulses sold at exhorbitant prices are rarely cooked in poor families. There are many who have become unable to afford meals both the times during day and night. This is intolerable because such a piquant situation has been created by no one else but the government itself.

Everyone affected by this abnormal inflation is restless but does not find any party in opposition or a platform from where he can give vent to his unspeakable anguish. Finding no one who can truly represent them they suffer in silence.

In my recent visit to Deoghar, a holy place of international fame in Jharkhand, I heard a government official complaining against the UPA Government in particular Prime Minister Manmohan Singh and his Cabinet Colleagues. He wanted to bring home the truth to me that when the BJP was in Power, prices were at least stable and were not likely to wobble over at every turn of the event. He said that Prime Minister Manmohan Singh often talks about expected price-rise as a result of which hoarders swing into action immediately and pile up goods in great demand which automatically lead to inflation.

Undoubtedly what the aforesaid official revealed to me is true and sheds light on factors which cause the prices to shoot up even when there is no shortage of food-grains and other essential commodities in the market.

What I have narrated above stands confirmed by an article also in which the blame of promoting speculative hoarding through irresponsible utterances has been, inter alia, elaborately laid on Sonia, as in the following words:-

“Rather than damp the fever of inflation, almost every week, Sonia Maino cries out her crocodile tears about inflation feeding the expectation that prices will go up still more and thereby promoting hoarding and speculation in essentials. In fact several of the worst offenders are to be seen regularly in the numerous darbars of UPA leaders, their faces wreathed in smiles even as their numerous international bank accounts swell with each turning of the screw on the newly organised Indian consumer. The shameless way in which certain known business entities are pushing up prices by speculative hoarding is well known to the agencies of the government, yet no action is taken (Organiser, April 28, 2008).

Before the coming of the UPA in power prices of essential commodities like rice, wheat, pulses, sugar, potatoes, milk, curd etc. did not register an abrupt rise overnight. If there was an increase in the price of a particular commodity that was generally not seen causing an increase in the prices of other commodities simultaneously. Today the situation is just the reverse. Take for instance, the rise in the price of pulses.

A particular variety of pulse called “Arhar” in Hindi was sold at Rs. 90/- per kilo recently. This exhorbitant price was not the result of any short-fall in its production. It was solely the result of speculative hoarding.

What is most irritating is that prices of almost all commodities have been raised without any corresponding increase in the cost of their production. Amul milk which was available at Rs. 26/- per litre only a few days ago is now sold at Rs. 30/- per litre. A particular sweet which cost Rs. 6/- per piece in the very distant past, is now sold at Rs. 12/- per piece. Is it not downright exploitation of consumers by greedy unscrupulous shopkeepers in the name of “Mehangai” (Price-rise)?

There are only a-few examples. Thousands of such examples can be cited to show that the current crisis of inflation is man-made and it is possible to tide it over.

As immediate corrective measures an anti-hoarding law and a law for fixation of prices of all essential commodities should be enacted with provision for confiscation of hoarded goods under orders against which no appeal would lie.

In order to curb price-rise it is also necessary to stop periodical revision of pay of government employees and payment of daily allowance to them as they promote anticipatory inflation and generate fictitious money. An impartial survey of pay-revision and simultaneous price-rise will confirm it. There is no moral, neither legal justification of revising the pay of a small section of people from the scourge of inflation while leaving the vast majority of farmers who toil day and night to give us food to die in penury without any relief against price-rise.

There must also be a ban on all wasteful expenditures by the Centre and State Governments.

Price-rise is a man-made malady. It can certainly be cured provided there is a will to do it.

(The writer can be contacted at A-207, Kalyani Apartments, Sector-06, Vasundhara, Ghaziabad (UP))