States must act strictly with hoarders, profiteers: Chidambaram

New Delhi – Finance Minister P Chidambaram has criticised states for not acting against profiteers and hoarders to check inflation.

Addressing the Delhi Economics Conclave in New Delhi today, Chidambaram asked them to deal strictly with hoarding and profiteering.

“There is also a need to deal wisely with harvesting and marketing and deal strictly with hoarding and profiteering . Laws in this behalf are entirely in the domain of the state government. Two laws stand out: one is the Agricultural Produce Markets Act and the other the Essential Commodities Act,” he said.

“The powers of notification and enforcement under these Acts are with the state governments, yet state governments are loathe to take action under these Acts. I think it is necessary to highlight the inaction of the state governments in this behalf, even while accepting that the central government must do all it can, within its powers, to moderate inflation,” he added.

Stating that current inflation is primarily driven by rising prices of vegetables and fruits, he said increasing supplies of food items can help contain it.

“The answer to inflation, therefore, especially inflation in food articles, is to increase supplies and to radically transform the manner in which commodities and food articles are stored, transported, distributed and sold in the various markets, especially urban markets,” he added.

Chidambaram said faster, sustained and inclusive growth must be the strategy for the next five years.

“We must remember that our ultimate goal is faster, more inclusive and sustained growth. We must refocus energy on human development issues. Let me recall that the number of poor declined from 407 million in 2004-05 to 270 million in 2011-12,” he said.

“Between 2004-05 and 2011-12, the average decline of the poverty ratio was 2.2 percentage points per year, which is about three times higher than the rate of decline in the poverty ratio during the period 1993-94 to 2004-05. A ‘faster, more inclusive and sustained growth strategy’ will continue to be on the agenda over the next five years,” he added.

He further said global economy would witness moderate growth in the coming five years and the U.S. economy growing at three per cent rate during the period can trigger global recovery.

“If the U.S. economy achieves a growth rate of three percent or more, that could trigger a worldwide recovery. The Eurozone faces many challenges. Germany’s Finance Minister summed it up when he said that Europe, given its ageing and stable or declining population, cannot aspire to growth rates of more than 1 to 2 percent. That leaves India and I shall speak about India presently,” he added.