PM asks states for steps to check inflation

Concerned over sky-high prices of essential commodities, Prime Minister Manmohan Singh has set up a special monitoring cell to keep a daily watch on the situation, and asked state chief ministers to come down heavily on speculators and hoarders.

In a letter to state chief ministers yesterday, Singh said the special cell in the cabinet secretariat will keep a daily watch on the price situation and provide support to state governments.

He said the state governments have an important role in checking the rise in the prices of essential commodities through a set of administrative and regulatory measures.

"You may like to put in place an appropriate mechanism for regular intensive monitoring of the prices of commodities in order to promptly detect any short-term fluctuations and take necessary corrective action," the Prime Minister said.

He said the state governments can play a major role in checking prices by curbing malpractices, profiteering and hoarding.

The Forward Markets Commission has already banned trading in pulses like urad and tur but there is a need to strongly monitor the activities of anti-social people who may indulge in speculation and profiteering, Singh said.

Increased supplies will temper inflation: FM

Finance Minister P Chidambaram said the cabinet committee on prices met today and reviewed the price situation. "Action taken so far to moderate prices were also reported to the CCP," he said.

Pointing out that he does not have a magic wand to produce commodities like onion, Chidambaram said:  "Supply of potato and sugar has improved, but there are supply constraints in other items. Supply-demand mismatch and high commodity prices globally have caused the rise in prices. As supplies improve, inflation will be moderate."

On forward trading in commodities, Chidambaram said, "the agriculture ministry is looking in to the standing committee report on the forward market and will bring the matter before the CCP." (BS Reporter)