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Journalism of Courage
Remember December 2010,when onion prices had crossed Rs 70 per kg? Worried over the possible after-effects of the spiraling onion prices,the government got agriculture cooperative body National Agricultural Cooperative Marketing Federation to intervene in the market by offering onions to consumers at Rs 35-40 per kg,almost half of the prevailing market rate. Within days,onion prices came down to 25-30.
A year and a half later,the Centre has drawn up a plan to facilitate direct market intervention by designated state government agencies or consumer marketing federations in the event of inflationary trends in the economy and rise in market prices of essential commodities.
According to a note prepared by the Ministry of Consumer Affairs,Food and Public Distribution for a meeting of committee of secretaries (CoS) headed by Prime Ministers principal secretary Pulok Chatterji,the market intervention fund would require a financial support of Rs 1,460 crore as annual corpus.
The scheme provides for sale of non-PDS essential commodities to consumers at prices lower than the prevailing market prices in case of sudden increase in prices of such items. To do so,the Centre will release funds to all state governments,which will be asked to earmark agencies for intervening in the markets through sale of essential items at prices substantially lower than inflated prices.
Sources told The Indian Express that while formulating its strategy,the Centre went by the experience of the Assam government,which distributes 21 essential commodities to consumers at minimum reserve price through a network of about 10,000 fair price shops. In Assam,manufacturers are encouraged to sell their products directly to these fair price shops at a price which is much less than the maximum retail price. The fair price shop dealer then sells the products for a small margin to the consumers,thereby ensuring that the price remains less than the printed price.
As per the scheme drawn up by the Centre,the finances of the earmarked agency would be augmented through a one-time financial package. However,the state governments that decide to create the market intervention fund would have to contribute 66 per cent share. The state governments would also have to set up a Price Monitoring and Market Intelligence Cell (PMMIC). Sources said the CoS has already discussed the matter and a final decision may be taken soon.
