RISING PRICES IN INDIA

Rising prices become political as BJP, CPI-M blame Congress

BY OUR POLITICAL CORRESPONDENT

4 April, 2008

Rising inflation is fast becoming a political issue in India. With elections round the corner, political parties are preparing to make use of the price issue to woo the electroate. The Congress-led United Progressive Alliance (UPA) has been blamed for the increasing price rise in the country. The Congress party fears that inflation would damage their electoral prospects considerably.

While global issues are said to be the reason for rising inflation in the country, the Congress has to bear the blame for opening up the doors for free trade. The other parties, including Communist Party of India (Marxist) and Bharatiya Janata Party are on the streets accusing the Congress party for their pro-reform agenda, which caused rising prices in the country.

The BJP has accused the government of their negligence on the production side. While the demand in the country is increasing fast, there are no sincere efforts from the government to address the supply side. Shifting of focus from agriculture sector growth has also contributed to rising inflation. The Left parties, who support the UPA government from outside, have also come out in the open against the government's inefficiency in containing price rise. The Left parties are expected to start a national agitation on April 15, 2008 against the rising price situation in the country. They have alleged that the Central government's measures are not fruitful to contain inflation.

It is said that duty elimination of edible oils will lead to more imports into the country. The CPI (M) has also asked for an immediate ban on futures trading in all commodities. They allege that futures trading has helped in the increase of prices as it attracts more foreign money into the market. The BJP has accused the UPA government as being instrumental in sharp rise in commodity prices as they have not taken any steps to control hoarding by private parties.

Meanwhile, responding positively to market conditions, the Central government has come out with a number of steps to contain inflation. The Cabinet Committee on Prices had scrapped duty on edible oil imports, on March 31, 2008. It has also decided to ban export of non-basmati rice. There are also moves to put in place a legislation limiting hoarding of rice and edible oil by private parties. Inflation has zoomed to a 13-month high of 6.68 percent, doubling in just a few months, with rising food prices a key culprit, figures last week showed.
 

 

 

 
 

 

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