Essential goods’ prices under Central government watch

The Naren­dra Modi gov­ern­ment has set up a mech­a­nism to mon­i­tor prices of key essen­tial com­modi­ties to ensure there is no unusu­al flar­ing in the ongo­ing fes­ti­val season.

The Prime Min­is­ter’s Office is being sent dai­ly updates on the food price sit­u­a­tion in four major met­ro­pol­i­tan cities of the coun­try. The com­modi­ties being mon­i­tored are wheat, rice, edi­ble oils and sug­ar. In edi­ble oils, prices of mus­tard, ground­nut and palm oil are of par­tic­u­lar impor­tance because they are wide­ly con­sumed dur­ing the fes­ti­val season.

Four to five senior offi­cials from the depart­ment of con­sumer affairs have toured var­i­ous parts of the coun­try to cross-check the price data fur­nished by state gov­ern­ments. For instance, there was huge fluc­tu­a­tion in the retail sug­ar price data in Raipur some time ago. “There was some­thing sus­pi­cious about the price move­ment as Chhat­tis­garh is nei­ther a major con­sumer nor a big pro­duc­er of sug­ar cane or sug­ar. Hence, we sent some offi­cers to ver­i­fy the data,” a senior offi­cial from the depart­ment of con­sumer affairs said. The data was found inac­cu­rate and cor­rect­ed lat­er, he said.

The exer­cise will con­tin­ue in the com­ing days as well to ensure there is no spec­u­la­tion and a cor­rect pic­ture on prices emerges, the offi­cial said. The whole mech­a­nism is hav­ing a bear­ing on prices. Retail prices of var­i­ous com­modi­ties mon­i­tored either declined or showed a mod­er­ate increase between Sep­tem­ber 1 and Octo­ber 1.

Food prices had shown a ris­ing trend imme­di­ate­ly after the new gov­ern­ment, the offi­cial added by Naren­dra Modi, took charge. Prices of onions, pota­toes and toma­toes surged. On its part, the gov­ern­ment took a series of mea­sures includ­ing pro­hibit­ing export of onions and pota­toes beyond a par­tic­u­lar val­ue and allow­ing state gov­ern­ments to impose stock-hold­ing lim­its on onions and pota­toes by bring­ing these under the Essen­tial Com­modi­ties Act.

Retail prices of onions did not rise much between Sep­tem­ber 1 and Octo­ber 1. These rose by Rs 2.5 a kg to Rs 27.5 a kg as on Octo­ber 1. Prices of pota­toes remained unchanged but at an ele­vat­ed lev­el of Rs 30 a kg. Toma­toes remained expen­sive, ris­ing by Rs 5 at Rs 45 as on Octo­ber 1 from Rs 40 as on Sep­tem­ber 1.

Retail price index-based food infla­tion has con­sis­tent­ly remained high since the new gov­ern­ment came to the office. It was 9.56 per cent in May, came down to 8.05 per cent the next month. But it again rose to 9.36 per cent in July and then fur­ther to 9.42 per cent in August.

How­ev­er, whole­sale food price index (WPI)-based infla­tion tells a dif­fer­ent sto­ry. Food infla­tion in terms of WPI stood at 9.64 per cent in May, towards the end of which the new gov­ern­ment took charge. Since then, it has declined to 5.15 per cent in August.