BJP alleges scam in food price rise

New Delhi: Terming rising food prices a "major scam", the Bharatiya Janata Party (BJP) yesterday said there was a nexus between some politicians in power and corporates.

Speaking to reporters here yesterday, BJP president Nitin Gadkari alleged that forward trading in essential commodities was "the main" cause of the current spell of price rise that has seen India's food inflation touching double digits. In forward trading, a trader takes a position in an equity before delivery.

"Forward trading of essential commodities like rice, wheat, sugar, pulses and edible oils resulted in 99 per cent speculative trading, [and] actual delivery [was] less than one percent," Gadkari said, quoting official data of 2009.

He said the beneficiaries were "multinational [companies] and corporates, manipulators, speculators and black marketers".

"There may be some political support, without which it is not possible. After all, government decisions are taken by the Cabinet. It is for the government to identify individuals and firms who benefit from all this," Gadkari said, making a power-point presentation entitled ‘Mahangai Ka Mahaghotala' (major scam of rising prices).

Failure

"It is an overall failure of the Congress-led government. It is the result of failure of the government's economic policies."

Asked if politicians from the ruling parties were hand-in-glove with these beneficiaries, Gadkari said, "I don't want to name them. I know. You check out the commodities exchanges where some companies have made huge profits."

Citing figures from the government departments, the Reserve Bank of India and the National Commodity and Derivatives Exchange (NCDEX), a multi-commodity exchange of the country, the BJP said profits of commodity companies in India had spiralled 2,900 per cent in the last three months of 2009.

"Consumers are paying three times more than the price paid to farmers," Gadkari said.

According to him, consumers buy rice at Rs32 per kg while farmers get a mere Rs10 per kg while wheat is sold at Rs24 per kg and farmers get Rs10.5.

"Sugar is sold at Rs50 per kg but a farmer gets between Rs14-18. Isn't this the collective failure of the government?"

Manipulation

He also accused the United Progressive Alliance (UPA) government of being involved in "manipulative export" of rice.

"Some 10 million tonnes of rice were exported at the rate Rs18-20 per kg while farmers in the country would get only Rs10 per kg," the BJP president said.

"This is not a one-ministry problem. There is no coordination between various ministries. There is no integrated policy."

He said the government didn't create a buffer stock of sugar when there was surplus stock.

"First, they exported 4.80 million tonnes of sugar at Rs12.50 per kg and are now importing raw sugar at Rs36 per kg, which is why the price of sugar went up to Rs50 per kg from Rs22 in one year."

Gadkari asserted it was not only Agriculture Minister Sharad Pawar's failure, "but the entire Cabinet of the Manmohan Singh government is to be blamed for food inflation".

"The UPA is fully responsible for the price rise. Pawar is responsible but not solely responsible. The prime minister, the group of ministers, UPA chairperson Sonia Gandhi are all responsible. They cannot escape by blaming him."