Joint action plan with states against inflation: Consumer Affairs Minister (Interview)

NEW DELHI - The central government will soon formulate an action plan with state governments on how to rein in the prices of essential items that have taken the annual food inflation to double-digits now, Minister of State for Consumer Affairs K.V. Thomas has said.

The minister also indicated that some ministries were studying the issue of banning or allowing futures trading in some essential commodities and appropriate action would be taken at the earliest.

“We are waiting for the report of chief ministers’ core committee on prices of essential goods headed by Gujarat Chief Minister Narendra Modi. We will study the recommendations, discuss it with states and plan a joint action,” Thomas told IANS in an interview here.

“Inflation can be controlled only with the joint effort of the Centre and the states.”

Earlier this month, Thomas, 64, a science professor-turned politician, was elevated to the rank of minister of state with independent charge for consumer affairs, a portfolio he had been handling before.

A steep rise in the prices of essential products, especially vegetables, triggered inflation to climb up to over 15 percent in recent weeks. Opposition parties have taken to the streets on the issue.

“We have to take a balanced, overall view on prices of commodities. While prices should be affordable for urban consumers, we have to ensure the farmers get a fair price too,” said Thomas, a four-time lawmaker and former minister in Kerala.

“Prices of essential goods is a sensitive issue. It can be controlled with the efforts of the centre, states and local bodies and merchants,” the minister said, adding: “The public distribution system and traders have too have a role.”

He said the core group of chief ministers and central ministers on price rise under Modi that was set up in February last year was likely to submit its report soon. “I think the draft recommendations are already being circulated among chief ministers.”

The core group includes the chief ministers of West Bengal, Andhra Pradesh, Tamil Nadu, Chhattisgarh, Bihar, Assam, Punjab, Gujarat, Haryana and Madhya Pradesh. The union Home Minister, Agriculture Minister and Finance Minister are also its members.

Asked if a ban on futures trading on essential commodities, as suggested by Left parties and some economists, was the solution, Thomas said: “Ban has both plus and minus points.”

Even China allows futures trading, he said. “Various ministries are studying the issue.”

According to the minister, reports that huge quantities of grain is rotting in godowns (warehouses) in Punjab and other states were hugely exaggerated. ” The loss is very less — only 0.02 percent.”

But he conceded that a long-term view had to be taken into consideration on the crucial issues of food security, affordable prices and decent remuneration to farmers,” he said. “Storage capacity of foodgrains has to be increased and losses at godowns minimised.”

(George Joseph can be contacted at george.j@ians.in)