New Delhi, April 14: Concerned over the headline inflation touching 7.41 per cent despite several macro-economic measures taken by the government, a crucial meeting of the Cabinet Committee on Prices (CCP) will meet here tomorrow to consider further moves to rein in galloping prices.
This will be the second meeting of the CCP in a fortnight, underlining the seriousness of the issue which had isolated the Congress Party, which heads the ruling coalition, with the friends within the UPA and the supporting Left parties, and the Opposition BJP being lined up against it. Though the government has been maintaining that the inflation was the result of global conditions, it is left with no option but to take some immediate concrete measures to bring down domestic prices in the light of the crucial elections to the Karnataka state assembly next month.
There are indications that the CCP may consider measures to bring down rising steel prices by banning export of steel and enhancing the export duty on iron ore. It is expected that steel prices would come down automatically once construction activity slowed down because of the monsoon. But the government cannot wait for such a situation as South-West monsoon is expected to hit the Indian coast only in the first week of June. There was a feeling among the constituents of the UPA and the Left parties that the measures already taken, which includes cutting edible oil import duties and banning non-basmati rice, were not enough to check unabated surge in domestic prices of essential commodities.
In the wake of unrest among the UPA partners on the price rise issue, the UPA Coordination Committee, the highest policy making body of the ruling multi-party coalition, may meet this week to discuss inflation and price rise. Prime Minister Manmohan Singh, Finance Minister P Chidambaram, Commerce Minister Kamal Nath, Agriculture Minister Sharad Pawar and Planning Commission Deputy Chairman Montek Singh Ahluwalia are the members of the CCP.
Notwithstanding the meeting of the CCP, the Congress Party believes there was no need for being panicky about the price situation. ''I appeal to all political parties not to create panic as such a scare-mongering would further fuel inflation,'' AICC General Secretary in charge of Media Veerappa Moily said.
The Congress Party believes that prices of essential commodities would moderate once the wheat harvest begins this month. The Centre has already asked the state governments to pro-actively enforce the Essential Commodities Act to curb speculation and act tough against hoarders and speculators. Congress Party sources indicated that the government might take drastic steps to protect the ''aam aadmi'' if the prices did not come under control.
''If inflation was to go totally out of hand, the government has enormous powers of rationing, physical controls and permits,'' the sources said, while pointing out that the Congress Party was, however, not in favour of going back to the old regressive regime of controls and permits and would prefer to use more sophisticated policy measures.
Meanwhile, official sources maintained that there was sufficient stock of food articles and there was no need for any concern on this account. As many as 5.8 million tonnes of wheat were available as against a buffer stock norm of five million tonnes. In the case of rice, the availability was 13.8 million tonnes as against a norm of 12.2 tonnes.
Similarly, the wheat harvest was likely to touch 75 million tonnes as compared to the annual demand of 72 million tonnes. With regards and rice production, against a demand of 88 million tonnes, production would be about 94 million tonnes.
''There is sufficient cushion available as far as food stocks are concerned, '' sources said, while asserting that the inflation was not demand-driven.