Communist Party of India (Marxist)

19th Congress

Anil Biswas Nagar

Coimbatore

March 29 to April 3, 2008

 

Resolution on Price Rise

Adopted at the 19th Congress on March 30, 2008

 

This XIX Congress of the Communist Party of India (Marxist) expresses grave concern at the continuing rise in the prices of essential commodities. The prices of wheat, rice, edible oil, sugar and pulses have increased by as much as 15 to 20 per cent in the last year, hitting hard the budgets of the people at large. Considering that the vast majority of working people do not have a fixed income and have no protection against inflation, such huge increase in the prices of essential commodities constitutes a regressive redistribution of income from the poor to the rich.

 

The annual inflation rate in the Wholesale Price Index touched 5.92 per cent in the first week of March 2008, climbing further to 6.68 per cent in the second week. The Consumer Price Index also shows a rising trend. The sharpest rise is in the prices of food and fuel, a rise that has a severe impact on the lives and livelihood of the working people. The price rise being experienced today is a direct outcome of the neo-liberal policies of the Union government. These include the wilful neglect of agriculture under the neo-liberal regime, under which the production of cereals, pulses, oilseeds and vegetables has stagnated; the weakening of the public procurement and virtual destruction of the public distribution system, and allowing domestic and foreign corporate players to freely procure and trade in foodgrain and other agricultural commodities.

 

The UPA government is not interested in reversing the decision taken by the BJP-led NDA government in April 2003 to permit futures trading in agricultural commodities, which enabled speculators to enter the commodity futures market in a big way and influence the prices of essential commodities. While futures trading in wheat, rice and pulses were banned in 2007 under severe pressure from the CPI(M) and the Left Parties, the UPA Government is eager to lift the ban and also permit foreign entities to trade in Indian commodity futures markets. The dilution of the Essential Commodities Act by the NDA government had curbed the powers of the Government to check hoarding and black marketing. The UPA Government has also refused to initiate any step against the hoarding of essential commodities by private players. Far from strengthening the PDS by bringing more commodities like pulses and edible oils within its ambit in order to provide relief, the UPA Government has cut the foodgrain allocation for PDS, thereby creating massive shortages.

 

The increase in the prices of petrol and diesel for the eighth time during UPA rule has also had a cascading impact on the prices of essential commodities. The Central Government has collected more than Rs. 40,000 crores more in 2007-08 in import duties on oil than what it had budgeted, due to the ad valorem structure of customs and excise duties, whereby the Government’s revenues also increase along with the price of oil. If these surplus revenues were returned to the oil companies, the necessity of increasing the retail prices of petroleum products would not have arisen. However, ignoring this suggestion made by the CPI(M) and the Left Parties, the UPA Government has resorted to successive increases in petroleum prices in keeping with rising international oil prices.

 

The UPA Government sought initially to justify inflation on the specious plea that “some inflation is inevitable in the face of high GDP growth.” The Government is trying presently to take refuge in the statistics of high global inflation in order to conceal its failures on the price front. The inaction on the part of the Government in checking price rise arises from neo-liberal dogma, which considers any State intervention in controlling prices as interference with the free market.

 

The XIX Congress calls upon the UPA Government to shed its neo-liberal approach and initiate immediate steps to check price rise. The CPI(M) demands that the UPA Government

 

·        Strengthen the Public Distribution System by universalizing it; restore the cut in foodgrain allocations to the states under the PDS; include 15 essential commodities including pulses, edible oil, and sugar in the PDS

·        Ban futures trading in 25 agricultural commodities as proposed by the Parliamentary Standing Committee on Food, Consumer Affairs and Public Distribution.

·        Cut customs and excise duties on oil and reduce retail prices of petrol and diesel.

·        Take stringent action against hoarding of essential commodities; strengthen the provisions of the Essential Commodities Act to empower State Governments to deal with hoarding and black-marketing.

 

The XIX Congress of the CPI (M) resolves to intensify the struggle against price rise, which burdens the working people of our country, and to ensure that these demands are met.

 

Take immediate steps to check price rise!