Govt put to embarrassment on price rise issue

New Delhi, July 28: The Congress-led UPA government today suffered a major embarrassment in the Lok Sabha when Finance Minister P Chidamabaram was left to fend for himself on the issue of price rise with the allies and supporting parties staging a walk out.

Even as Mr Chidambaram was replying to a debate on price rise, the BJP-led opposition staged a walk out alleging that the government had failed to act against hoarders, profiteers and blackmarketeers and rein in on the prices of essential commodities.

In no time, the members of Samajwadi Party, which extends outside support to the Manmohan Singh government, trooped out, announcing that they were dissatisfied with the explanation sought to be given by the Minister for the rise in prices.

With no support forthcoming from treasury benches and in the absence of any senior Ministers, Mr Chidambaram ploughed a lonely furrow, often interrupted by the members from the Left parties, which also backs the government.

The Left then staged a walk out alleging that the government had failed to curb price rise and strengthen the Public Distribution System.

The members of the Rashtriya Janata Dal (RJD), a major partner in the ruling coalition, also expressed dissatisfaction over the anti price-rise measures and left the house.

It was all the more embarrassing for the government when voices of dissent were heard from among the Congress members. Minister of State for Parliamentary Affairs B K Handique had a wordy duel with his party colleague Hari Singh Chawda who asked loudly "How will we face the people?'' When Mr Handique asked him to raise such issues in the party fora, he was heard retorting angrily ''We do not get a chance to raise such issues in Parliament and also in the party forum.'' During the reply by Mr Chidambaram, only a few Ministers, including S Jaipal Reddy, A R Antulay, Santosh Mohan Dev and Jairam Ramesh, were present in the house.

Mr Chidambaram explained the various steps taken by the government to maintain prices of essential commodities.

Mr Chidambaram said the prices of essential commodities had gone up because of the upward general inflation due to cost push and demand pull. In order to moderate cost push, steps were taken on the fiscal side by the government, while the RBI was taking measures on the monetary side. A bill to put in place a forward market regulator with more powers is likely to be introduced in the current session of Parliament. The Food and Consumer Affairs Ministry was examining whether futures trading in essential commodities should be banned.

Saying that there was no magic wand to bring down the prices of essential commodities, Mr Chidambaram said the centre was ''acutely'' conscious of its responsibility to bring down prices.

In this context, he said the only way to moderate prices was to augment the supplies. It was in keeping with this that the government had decided to import wheat, pulses and sugar when there was a supply shock.

The Minister said the prices of wheat would become moderate once procurement started. ''It would help to remove the pscyhology of shortage and moderate the price.'' The prices of sugar went up because of shortage of production due to the sugarcane farmers switching over to other crops in the last season. The change in crop followed crash in prices of sugar during the previous season.

Stating that the state governments could play a ''proactive'' role in moderating prices, Mr Chidambaram assured the states that the centre would give immediate permission if they seek to issue control orders to fix stock limits, stop manipulation of market and hoarding.

He said the previous NDA government had repealed all control orders on February 15, 2002. ''This action should be revisited.'' Though the previous government had repealed all control orders, it allowed states to issue the orders with the Centre's permission.

On the allegation that the price rise was contributed by a weak public distribution system, Mr Chidambaram said the Centre had not reduced allocation of rice and wheat to states for distribution through PDS network. But many states were not lifting the allocated quantity of rice and wheat.

''We have no intention to reduce allocation to PDS,'' the minister said.

On the demand for reducing oil prices, he said the recent increase had not brought any bonanza to the exchequer. The government had reduced customs and excise duty on petroleum products. ''We cannot it reduce further,'' he added.

UNI