22/04/2008 (The Economic Times), Mumbai - The state government’s raid spree on shopkeepers to arrest soaring prices of essential commodities will not yield desired results, say traders. According to official data, so far 3,628 shopkeepers all over Maharashtra have been raided and over-stocked goods worth Rs 53.83 crore have been seized in the last ten days.
“The state government will have to do more if it’s serious about price hike, raids will not help much. It has conducted raids on 3,628 shops but has booked only 36 of them. This means only 1% of the raids have exposed hoarding and the rest are innocent,” says Kishor Kharawala, secretary of Federation of Association of Maharashtra (FAM).
According to him, though the inflation has gone up to 7%, actual price rise in commodities has not been even 2% for the last 12 months. The government is confiscating stocks of commodities that have shown the least price hike, he pointed out. Compared to these, prices of fruits, vegetables and dairy products have been rising much faster than that of grain and pulses. “What has the state government done to control other price hikes?” he asked.
Besides raids, the state government has announced waiver of Agriculture Produce Marketing Committee’s tax for three months from May 1 to help prices cool down. The APMCs charges traders who buy agriculture produce from whole-sellers and sell it to retailers. Along with this, the Brihanmumbai Municipal Corporation too has abolished octroi on tea, sugar, vanaspati ghee and edible oils. In order to check soaring prices, the state government is even planning Rs 15 per kg subsidy for palm oil.
This, and not the raids, will have a positive impact, the traders feel. Bombay Suburban Grain and Provision Dealers Association’s secretary Chandrakant Gala say that the palm oil subsidy will help ease prices in other edible oils too. “The price concession will boost demand for Palm oil which will eventually lessen the burden on other products,” he explained.
But not everyone agrees. “Abolition of octroi will bring marginal reduction in prices. It could be around 0.2% while the APMC tax relaxation will offer concession of 0.80%. Effectively put together, these two concessions will offer Rs 1 discount per Rs 100. This could hardly be a respite,” said Sharad Maroo, president of Grain, Rice and Oilseeds Merchants Association (GROMA). The price cut these concession offers is too small a measure, he said.