Ban online trading of essential items

Crosser

Instead of immediately banning futures trading in farm products, P. Chidambaram has announced setting up of a committee which will give its report in two months. This is in spite of the clear writing on the wall in the light of continuous rise in retail prices of onions, sugar and other essential items. Who is calling the shots at the Finance Ministry? Who is concerned about the plight of the poor?

COMMODITY prices have always known to influence voting patterns in elections and political parties have a history of colluding with sympathetic businessmen to inflate or deflate prices of essential commodities to swing votes. Not too long ago, soaring onion prices - that were alleged to have been engineered - helped the Congress beat the ruling BJP in Delhi at the 1998 election. It is being said that the same method was used to increase the sugar prices in Maharashtra recently, thus leading to rise in the share price of companies like Bannari Amman Sugar, Dhampur Sugar and Bajaj Hindustan.
In spite of Congress personally benefiting from allegedly engineered prices till some time back, it is surprising why P. Chidambaram and company under the patronage of the so-called guru Dr. Manmohan Singh continued to look the other way while the prices of essential commodities continued to rise unabated due to speculative futures trading. As late as July last year, the Government continued to deny any move to ban futures trading in spite of concerns raised in this regard by those aware. On the sidelines of a FICCI meeting, Union Consumers Affairs Secretary, L. Mansingh, had said in July 2006: “There is no question of banning future trading in essential commodities. Future trading has stabilised volatility in prices." In September last, The Tamilnadu Chamber of Commerce and Industry called for a ban on online trading of all essential commodities and its President, S. Rethinavelu, said since the withdrawal of stock holding limits and licensing requirements under the Essential Commodities Act in 2002, the items have been transported and sold without any constraints all over the country.
Only when a hue and cry was raised by some sections of the media mirroring concern over rising prices of food articles and demand to ban futures trade in farm products, the Government has woken up and said it would study the impact of this on prices of essentials. It has also announced setting up of a Committee headed by Planning Commission member Abhijit Sen, which will give its report in two months. However, P. Chidambaram still did not confess that speculative trading was responsible for price rise and sidetracked the issue in his budget speech by blaming global commodity price and supply constraints as reasons for increase of prices of essential commodities like wheat, pulses and edible oils.
It seems that the Government is playing in the hands of some vested interests and their like-minded media groups who are carrying the pleas from investment gurus such as Jim Rogers (a big commodity bull) to let in foreign investors and speculators into the Commodity Markets. The Government is not realizing that if that happens, then rampaging commodity speculation will push up the prices of essential commodities so high that it can only lead to a bloodbath.
Physical commodity contract design in India too remains lopsided and favours the speculators. In the US, commodity contracts are physically delivered while in India this system of mandatory physical delivery was done away with due to reasons best known to our worthy gurus of market economy. Consequently, large scale speculators and investors, least related to the industry, came in leading to bullish prices.
There are still two months for the Abhijit Sen committee to give its recommendations. Till then P. Chidambaram has ruled out new contracts in wheat and rice in the futures market. However, it is too little done too late. If Abhijit Sen is really sincere about the plight of the poor, then we already know what his recommendations are going to be. There is no other path to ban all such trade with immediate effect.

New law against communal violence futile without the political will

Union Home Minister Shivraj Patil said sometime back that the government would soon bring in a model comprehensive law to tackle communal violence in the country. For reasons best known to it, the Samajwadi Party decided to oppose this Communal Violence (Prevention, Control and rehabilitation of Victims) Bill, 2005.
The state’s opposition to the proposed legislation stemmed from the fact that under the Constitution, law and order is a state subject, and any Central law on the subject should be operative only in Union territories. Any law that does otherwise negates the spirit of the Constitution. And if the Centre is given the power to interfere in one subject on the state list, the intrusion may soon spread to other subjects as well. Legal opinion provided to the state cautioned that through the bill, the Centre will have sweeping powers as in an Emergency.
The UPA’s Common Minimum Programme had promised a separate comprehensive law on communal violence under which investigations would be carried out only by Central agencies and prosecution by special courts. Mr Patil’s statement indicates that the government intends bringing in legislation to contain communal violence.Some have questioned the need for new legislation on the matter. After all, there are several laws to take care of such situations. For instance, Section 153-A of the Indian Penal Code provides for punishment for any act, which is prejudicial to the maintenance of harmony between different religious, linguistic, or regional groups or castes or communities and which disturbs or is likely to disturb the public tranquillity. There is legislation to tackle the inciting of violence and so on. Existing legislation to tackle communal violence has failed in the past because of poor implementation and a lack of political will. As evident in Gujarat in 2002, the attack on minorities assumed the immense proportions it did because the BJP government in the state along with the police force was complicit in the violence and refused to take steps to arrest its spread. There is no guarantee that the Central government would necessarily act to check communal violence if the state government is reluctant to do so. The BJP-led government in the centre simply looked the other way in the case of Gujarat. The Congress was in power at the Centre and in Maharashtra in 1992, when communal violence broke out after the demolition of the Babri Masjid. The Centre took no action when the Maharashtra government did not act effectively to halt the violence.No communal riot can occur if the government and its law and order machinery are determined to prevent or arrest the spread of such violence and virus. The need for keeping the intelligence apparatus in a fine fettle and making effective use of the input for nipping the trouble in the bud is also equally crucial. What is needed is political will to prevent the spread of the communal virus. The proposed new law could end up as just another piece of legislation if the government does not back it with effective implementation.
The raging violence in UP at present is an indicator how small incidents can turn barbarous, if the political will is only to seek benefits in elections, no matter at what costs. And if Congress has opened up a front against SP at the moment, it is merely because it is in opposition at the moment. Otherwise, Congress too can be blamed for many a riots in the past. Even the Srikrishna Commission that was attempting to unearth the names of those who were responsible for Mumbai riots that led to more than 1000 people killed and looting, arson and rape continuing for days, was terminated without a whimper, thus protecting the identities of those involved in the riots, including some policemen, perhaps forever.