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Price-rise casts a shadow over assembly poll

George Iype in New Delhi

Bruised by the spiraling prices of pulses and essential vegetables like onions, tomatoes and potatoes, the Atal Bihari Vajpayee government is now eagerly waiting for a series of positive factors which officials say would make a turn-around in the price situation before the assembly election.

Even as the Opposition parties are preparing to make the unprecedented price rise the main issue in the forthcoming poll in Delhi, Madhya Pradesh, Mizoram and Rajasthan, the Bharatiya Janata Party leadership fears that soaring prices of essential food items could risk the longevity of the Vajpayee government.

Already key regional allies like All India Anna Dravida Munnetra Kazhagam general secretary J Jayalalitha and Trinamul Congress chief Mamata Bannerjee have accused the government of being callous in arresting the price rise in the country.

"We fear the price rise has the potential to bring down our rickety coalition government. Therefore, we are waiting for the prime minister's special package to check the prices to take effect," a senior BJP leader in the party's economic wing told Rediff On The NeT.

The prime minister's package announced on Saturday included duty-free import of pulses, five percent special duty on vanaspati, procurement of onions from surplus states to worst-affected states like Delhi and setting up an official panel to review the prices every week.

The BJP leader said the party's economic wing had anticipated that the price would dramatically rise due to bad crops way back in July and pleaded with the prime minister and the finance minister to stop export of vegetables like onions, potatoes and tomatoes.

"But the government neglected our ultimatum and now the price rise has suddenly become a political issue on the eve of the crucial assembly election," he lamented.

However, officials say though the Centre intervened belatedly, the flurry of measures announced by the prime minister to arrest the soaring prices will soon bear fruit because of three factors.

First, the government hopes that since the weather has considerably improved in key crops-producing states like Maharashtra, production will pick up momentum soon and essential vegetables like onions, potatoes and tomatoes will reach the market.

Second, officials believe the policy initiatives from the government such as freeing imports and lowering customs duty have begun to increase availability as well as conducive sentiments in the market. As per the government strategy, availability of liberal imports of essential commodities would force domestic traders and hoarders to unload their stocks of essential food items in the market.

Third, the Vajpayee government is certain that since price rise is a national phenomenon, the state governments will soon co-operate to crack down on hoarders and facilitate transport of essential items from surplus to scarcity areas.

For instance, the Centre has already directed the National Agricultural Federation to procure onions from surplus states for Delhi. It has also ordered the Uttar Pradesh government to supply potatoes to other north Indian states.

While hoarding is said to be one of the main reasons for the escalating price rise, the Vajpayee government thinks that key Opposition-ruled states like Madhya Pradesh, Orissa, Karnataka and Tamil Nadu artificially tried to create a food shortage by restricting the movement of commodities to other states.

But the Congress, which is banking on the price rise to win the assembly election, says failure of effective and timely economic management by the Vajpayee government has resulted in the present crisis.

"We agree that the increase in prices has been sparked by a fall in production this year. But this has been fuelled by grave policy errors and long delay in taking corrective steps by the BJP government," says Jairam Ramesh, secretary in the Congress's economic department.

He said the government is passing "through a dangerous phase because the prime minister and finance minister have lost face on the price rise."

"The government is not in control and the prices of essential commodities across the country are dictated and determined by hoarders and black-marketers," Ramesh added.

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