Modi No Magician But Crack Down On Onion Cartels Needed

Prime Minister Modi and his ministers have no magic wand and the problem of price rise is not going to vanish in a day. But at least they understand the problem.

Remember last year when the onion prices were touching the sky?

Similar thing is likely to happen, or one may say, is already happening in the new Narendra Modi-led BJP government.

After the rail fare hike, which people accepted without much fuss, and rise in the prices of fruits and vegetables, the government has hiked the price of non-subsidised LPG cylinders by Rs 16.50. With the rise in the price of onions, now there is a whisper among the people. They have started questioning the methods of the elected government and the main stream media with decimated opposition parties is all set with its hunting team to feast on the mistakes of it.

The ministers in the Modi-cabinet have said that they are dealing with the legacy of the previous UPA government and these are just aftershocks which will be over very soon. Minister of food and distribution, Ramvilas Paswan, has said that the onion cartel is behind the soaring prices of the commodity.

According to Paswan, given the less monsoon situation prevailing in the country, the hoarders and black marketeers are trying to reap profits and trouble the new government. Paswan said that it was a short-term phenomena and that it will be over soon given then end of monsoon season in two months. The statement has been supported by many other BJP ministers and MPs.

Paswan is, in fact, right.

A similar crisis was in place during 2010-11. At that time too, prices of onion touched Rs 100 a kg at retail outlets. Then, the competition commission of India conducted a probe into the issue. They asked the Agriultral Development and Rural Transformation Centre (ADRTC) and the Institute for Social and Economic Change, Bangladesh to analyse the nature of the crisis.

The study revealed that prices had soared because traders had formed a cartel. It also said that farmers had little say in price determination. It recommended allowing of a new set of traders and commission agents into onion markets. However, the government did little in this respect.

This time as well, the price movements and arrivals clearly indicate that the sky high prices are not based on any fundamentals but on cartelization.

Last year in September-October when the onion prices had soared in the country, then agriculture minister and NCP chief Sharad Pawar had told the media that he and his ministry had “nothing to do” with the rise in onion prices across the country. Shifting the blame on food minister KV Thomas he said that the price rise will have to be checked by the ministry of food and consumer affairs.

Pawar had said that the export of onions has been least in three consecutive years. Even after this claim, India remained one of the largest exporters of onions in the world. In 2011, India stood fourth in the world exporters list. Rather than cutting the exports, Pawar had been involved in blame-shifting.

Prime Minister Modi and his ministers have no magic wand and the problem of price rise is not going to vanish in a day. But at least they understand the problem. The need now is to crack down on the cartels so that the problem is over for once and all.

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