People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 32

August 07, 2011



Congress, BJP United in

Denying Relief to Aam Admi


THE relentless rise in the prices of all essential commodities is continuously imposing greater burdens on the vast majority of our people. It is only natural that the people expect that the current monsoon session of parliament, long delayed by the government which sought to buy time in order to tackle the issue of the Lokpal Bill, will not only discuss this issue but will pressurise the government to act in taking important decisions that would provide relief to the common people. 


This is a perfectly legitimate expectation of the people. In our constitutional scheme of things, the parliament, apart from making laws through legislation and drawing the attention of the government to issues of public importance is also expected to perform the important duty of making the government accountable. The accountability of the executive to the legislature and the latter’s accountability to the people is how the supreme sovereignty of the people is exercised in our constitutional scheme of things. 


Reflecting the urgent concerns of the people and in tune with our Constitution, the Left parties had decided to raise the issue of price rise as a priority in this session.  Discussions on price rise have taken place at least ten times since the UPA-I government assumed office. But nothing substantial emerged and the people continue to be burdened.  That is why the Left parties, like in the monsoon session of 2010, insisted that this discussion this time take place under Rules that entail voting. Last year, as a result of this pressure, the government finally relented to a procedure where the Chair in both the Houses moved a commonly agreed text of the resolution. The resolution adopted by both the Houses unanimously last year called upon the government to take all required measures to protect the aam admi from the negative impact of inflation.


During the course of this year, not only has this UPA-II government not taken the required concrete measures to curtail this price rise, but, on the contrary, has announced further hikes in the prices of petroleum products. This has ironically, fuelled higher overall inflation in the economy.  Both directly and indirectly, through the rise in transportation costs, these hikes have imposed greater burdens on the people. 


It is in this background that the Left parties had insisted on a discussion in the parliament, in both the Houses, under Rules that require voting.  The fear of facing a vote, it is hoped would put sufficient pressure upon the government to concede some of the concrete demands that we, from the Left, have been consistently raising.  We shall return to these issues subsequently. 


However, facing this insistent pressure by the Left parties, the government came to an agreement with the principal opposition party – the BJP – on a common draft that would be moved by the opposition but would be voted upon together by the Congress and its allies as well. This draft resolution moved by the BJP in the Lok Sabha only replicates what has been passed by both the Houses last year. It, therefore, holds no hope of any relief for the people.  The Left parties have, therefore, moved an amendment to this draft to the affect that the government has not only not taken the required measures to contain price rise but, on the contrary, has contributed to further rise in the prices imposing greater burdens on the people.  Since the discussion is taking place under Rules that require voting, the Left parties have decided to seek a division of vote on their amendment.


This agreement on a common draft that the UPA government has come to with the BJP-led NDA parties once again unequivocally shows that as far as economic policies are concerned, there is little difference between the Congress and the BJP. The BJP government’s involvement in multiple corruption scams in the state of Karnataka is also testimony to the fact that on the issue of corruption -- that these economic policies facilitate -- there is yet again little difference between the BJP and the Congress. 


By insisting on a vote on its amendment, the Left parties hope to pressurise the government to take concrete measures that will arrest, if not reverse, the current price rise.  One of these issues is that of banning, or, at least, temporarily suspending speculative commodity trading that is hugely contributing to this price rise.  Consider the following: According to the Forward Markets Commission, the total value of trading at the commodity exchanges during the fortnight July 1 to 15, 2011 was a whopping  Rs 7,05,007.23 crores.  The corresponding figure for the previous year was Rs 4,15,215.65 crores.  This represents an increase of nearly 60 per cent. Likewise, the cumulative value of trade from April 1 to July 15, 2011 was Rs 45,34,237.88 crores. The corresponding figure for 2010 was Rs 28,71,202.91 crores.  This represents an increase of nearly 64 per cent.  Of this, the total value of trade in agricultural commodities during the fortnight ending July 15, 2011 was Rs 90,896.89 crores. This increased from Rs 49,127.86 crores for the corresponding period in 2010.  This represents a huge growth of more than 85 per cent.  With such massive growth in speculative trading, it is only natural that this contributes heavily to the rise in prices. Such speculative trading can earn profits only when prices rise. Since the value of trade is growing at such exponential rates, it is only natural that prices continue to rise providing super profits that attracts greater values into this speculative trading.  The government consistently refuses to ban such speculation in order to curb this price rise.  Clearly, providing avenues for speculative profits is more important for the government than providing relief to the aam admi.


The other important factor that contributes to this price rise is the hikes in the prices of petroleum products.  Between June 26, 2010 and May 14, 2011, the prices of petroleum products have been increased on nine occasions.  On top of this came the June 25 hike in the prices of diesel, kerosene and cooking gas.  These hikes have been sought to be justified by the government as being necessary in order to meet the gross under-recoveries by the oil companies.  Repeatedly through these columns, we have exposed the falsehood of such a claim.  Under-recoveries are not losses. They are  notional losses calculated on the basis of international prices of petroleum products and not on the basis of the domestic costs of production.


Another argument that the government forwards is that it heavily subsidises these petroleum products and it cannot afford such a burden. Leave aside the massive loot of the nation’s resources that is taking place, which amounts to many times the subsidy that the government provides in this sector. The falsity of this argument has also been exposed repeatedly in these columns.  Consider, for instance, the contribution to the central government exchequer from the taxes in the petroleum sector was reportedly Rs 1,36,000 crores. Additionally, this sector contributed about Rs 80,000 crores to the state governments through state taxes.  Thus, a whopping over two lakh crores of rupees have been collected through taxes on petroleum products during the last fiscal year. At the same time, the budget papers inform that the subsidy provided by the government including the oil bonds issued on the public sector oil marketing companies during the same period was Rs 40,000 crores. In other words, the subsidy provided by the government is less than a fifth of its revenues from the oil sector. The government must, therefore, immediately rollback these hikes in the prices of petroleum products. 


Apart from universalising the public distribution system and releasing the excess stock of foodgrains held by the central government, these two specific measures of a ban on speculative trading and the rollback of hikes in the prices of petroleum products are absolutely essential to contain this run-away price rise and provide relief to the people. 


By moving an amendment to the Congress-BJP agreed resolution, the Left parties would put pressure on this UPA-II government to undertake these measures and protect the aam admi from being battered by greater economic burdens. Needless to add, the struggles inside the parliament need to be buttressed by the strength of the people’s struggles outside. The Left parties are committed to wage both these struggles relentlessly.


(August 3, 2011)