Speculation a reason behind inflation: CPI(M)

The CPI(M) today said speculation was a major reason behind spiralling prices and asked the government to take urgent measures to contain inflation, including immediate withdrawal of 25 essential commodities from the futures market.

Taking a dig at the government's contention that price rise was a "global phenomenon", senior party leader Sitaram Yechury said, "it is directly connected with the recessionary crisis in the US which has liquidated many multinational institutional investors."

These FIIs "have entered the futures commodities market in a big way to cut their losses. That is the major reason for the spurt in the global prices," he told reporters here.Therefore, if speculation is leading to high prices in the world, "India must protect itself by immediately withdrawing all essential commodities from the futures market," he said.

Describing as "criminal" the "drastic cuts" in foodgrain allocations to states including Kerala and West Bengal, the CPI(M) leader said this was also contributing to rising prices and demanded its immediate restoration.      While the allocation to Kerala had been slashed from 1.33 lakh tonnes to 21,000 tonnes, the allocation to West Bengal had been reduced from 1.22 lakh tonnes to 62,000 tonnes, Yechury said.