In an attempt of controlling retail inflation, the government has reportedly amended the metrology rules which would allow it to fix retail prices of essential commodities in extraordinary situations.
At present, market forces fix the retail prices, leaving very little scope for the government to check an undue spike in prices. In order to address this limitation, notification states that “if the retail sale price of any essential commodity is fixed and notified by the competent authority under the Essential Commodities Act, 1955, the same shall apply.”
According to the reports, the newly drafted rule will apply to essential commodities that are sold both in loose and packaged form in retail markets, a senior consumer Affairs ministry official tells that, “We have already notified amendments to the Legal Metrology (Packaged Commodities) Rules, 2011, to include a provision to fix the retail price of any essential commodity.”
Presently government has measures to control wholesalers and importers, but not retailers. The report adds that this provision will help the government take proactive steps in the interest of consumers, the official said.
The question that comes across is that whether the government will fix the retails prices of essential items on a daily basis now, but the official assured that, “Not exactly. It will be done only in extraordinary situations when retail prices shoot up abnormally.”
Centre has been trying to curb the price rise in pulses, which touched almost Rs 200 per kilogram in the retail markets in June 2016 due to a shortfall in local output in view of drought. The Government then had to opt for imports and a hike in Marginal Selling Price (MSP) etc, to boost domestic supply, and finally the prices have stabilized to an extent.
Tim Worstall, a contributor in Forbes, with strong opinions about economics, finance and public policy etc believes that “India has managed to regress on economic policy. They have decided to start messing with prices in times of dearth. This is exactly, precisely and completely the wrong thing to be doing. Fixing prices makes shortages, that dearth, worse, not better.”