Updated: October 15, 2020 8:44:39 pm
After days of onion prices rising constantly in Maharashtra’s Lasalgaon market, income tax officials on Wednesday raided the premises of 10 wholesale onion traders in Nashik district. The raids come exactly a month after the central government banned the export of the bulb and 27 days since Parliament amended the Essential Commodities Act, 1955, to remove onions, potatoes, edible oils, cereals, pulses and oilseeds from the list of essential items.
Nine wholesale traders in Lasalgaon and one in the neighbouring town of Pimpalgaon were visited by income tax officials, said Jaydutt Holkar, chairman of Lasalagon’s wholesale mandi. The I-T officials visited the residence, office and onion storage godowns of the traders to inspect their books and stock of onion. The officials who conducted the visits were associated with the office of Director Investigations, attached with the Chief Commissioner of Income Tax’s office in Pune.
In protest, onion traders in Lasalagon have decided to boycott the trade for the next seven days.
Holkar claimed the raid was in line with a “pattern” seen over the years. “When onion prices start rising, first exports are banned and when that fails to cool down prices, income tax officials come knocking on the doors of traders,” he said.
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Speaking to The Indian Express, local traders attributed the constant rise in prices to destruction of kharif crop due to heavy rain in Karnataka’s onion fields in September, which has hit the supply of the bulb. Currently, the onions arriving in the market are the ones which are grown in Maharashtra, harvested and stored in on-field structures, called kanda chawls, in March and April. Onion growers from Maharashtra are expected to harvest their next crop in November, after which prices are expected to cool down.
The raids come at a time when Consumer Price Index(CPI), especially the Consumer Food Price Index (CFPI), has shown an upward trend. As against the government’s mandate of a below 6 per cent CPI, the September CPI, as declared by the Ministry of Statistics and Program Implementation (MOSPI), was 7.34 while the CFPI was a high of 10.68.
The CPI and CFPI in August were 6.69 and 9.05, respectively.
Retail prices of the kitchen staple in most urban centres, as per data from the Price Monitoring Cell of the Ministry of Food and Consumer Affairs, has hovered between Rs 40 and 50 per kg.
Holkar said this is the third time in the last five years when wholesale onion traders have faced an income tax raid. The last two raids were in September 2017, right before the Gujarat assembly elections, and November last year, when prices had crossed the Rs 4,000 per-quintal mark. “In all three instances, the raids have come at a time when onion prices were bullish before a major state election. If it was the Gujarat assembly polls in 2017, it was the elections in Jharkhand and Haryana in 2019. Now, as Bihar goes to polls, the sleuths have come knocking on our doors,” he said.
The I-T raids this year come at a time when the central government has taken off onion from the list of items to be governed by the Essential Commodities Act, and there can’t be any surprise imposition of stock limits by government to control the price. “All this was supposed to help free trade of onions… but first came the export ban and now this… this government seems to be confused..,” said Holkar.
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