Vol. XL No. 32 August 07, 2016

The Week in Parliament

CPI(M) Parliamentary Office

BOTH Houses of Parliament took up short-duration discussion on the situation arising out of price rise in the country in the last week of July. Speaking in the Rajya Sabha, CPI(M) leader Sitaram Yechury said it is an extremely important issue that concerns the life and death of our people. Recently, the CPI(M) had organised a nationwide protest action, in which lakhs and lakhs of people participated. That generally shows the manner in which people are concerned about the relentless rise in the prices of all essential commodities. The overall retail inflation is on a 22-month high, at 5.77 percent. The food inflation is close to 8 percent. Prices of potatoes have gone up by nearly 65 percent, pulses by 27 percent and vegetables by 17 percent. The government should crackdown on hoarders and black-marketers. Between 2014 and 2016, price of gram dal has gone up by more than double, a 100.65 percent increase; arhar dal has gone up by 100.26 percent; urad dal has gone up by 99.34 percent. There is no doubt that state governments have a role too in bringing down the prices. Hike in fuel charges effected by the central government has increased the rate of inflation in an overall manner, as there is an inflationary spiral that is set in motion when fuel prices go up because of transportation costs.

When this government took office, the international price of crude was 106 US dollars per barrel. It came down to 26 US dollars per barrel in January, 2016. It is now going slightly up. It is around 40 US dollars per barrel now in July. Price of diesel is Rs 54.30 per litre when the refinery delivery cost to petrol pumps is only Rs 25.10 per litre. Petrol price is Rs 62.56 per litre while the refinery cost at delivery is Rs 22.94 per litre. It is because after this government came, it has hiked excise duty on petrol and diesel nine times. As a result, people are paying Rs 40 more per litre for petrol; they are paying nearly Rs 35 more per litre for diesel and this is leading to a rise in overall rate of inflation. Also, there are hikes in cess that the government has introduced in the last two years, besides introducing new cesses. When the consumer pays all these cesses, it only adds to the rate of inflation. Cess has nothing to do with the states. In fact, whatever is earned from the cesses is earned directly by the central government and not shared with the states at all. It is an overall miserable situation. The minister for commerce says that 1.35 lakh jobs have been created. How many youths join the job market every year? It is 1.3 crore. As against that, we have created 1.3 lakh jobs. What about the backlog? With this level of unemployment and this sort of price rise, it is actually killing the people. This is causing greater and greater misery, and this is happening directly because of the decisions of the central government.

What needs to be done immediately is that we must ban forward trading and future trading on all essential commodities. That is absolutely essential because speculation has taken over everything. It has reached a situation where power is becoming a part of this speculation. Power transmission has been privatised. People, who are transmitting power, private transmitters, are not linking up to the grid. They are not linking up to the grid because of speculation on the pricing and because of that the country suffers power shortages. If the government is serious about controlling inflation and providing some relief to the people, it must rein in speculation.

The other point, which is also very important consider in this context, is that price rise or inflation is a classic income redistribution measure. Inflation means the income is redistributed from the consumer to the producer, that is, the consumer pays more and the producer earns more. But in our country, it is not the producer who is gaining. It is the people who trade in between who are gaining the most. Take the example of dal. We are buying dal and we are assuring our farmers a minimum support price of Rs 50.50 per kg. It is selling in the market at Rs 120 per kilo. We  are paying Rs 152 to import the same dal from farmers in foreign countries. Here, inflation means consumer suffers, producer suffers, and the middleman gains. This is the classic case of redistributing income from the poor to the rich. Such redistribution is happening in our country when the economic inequalities are already widening. The government will seriously have to address this question of curbing speculation and ban trading in essential commodities and, stop these cesses, these excise duty hikes, and thereby, provide relief to the people and ensure proper MSP.

Taking part in the discussion in the Lok Sabha, P Karunakaran said the issue of price rise was one of the major slogans of NDA in the run up to the 2014 Lok Sabha election. They promised to the nation that if they were voted to power, they would control price rise and ensure supply of essential commodities to the common people at the minimum price. The experience of the common people today is entirely different. The prices have gone up and the government has failed to control prices of essential commodities. This has adversely affected the lives of the common people. There is no control over the last leg of the supply chain. Retailers are having a profit of more than 50 per cent. They are speculating on the shortage of goods and commodities and hoarding them and the prices are going up due to black-marketing and hoarding. We have sufficient legal provisions in this regard, that is the Essential Commodities Act, 1955. When we look at the figures of 2014, 2015 and 2016, we find that the government conducted 1,34,438 raids but only 38 persons were prosecuted. The government has to take stringent steps to control black-marketing and hoarding.

There is another factor which is even more alarming and that is the increasing prices of petrol and diesel. When petroleum products were deregulated, the country was told by the then government that taxes would be reduced to zero. Now while the oil companies pay Rs 25.31 per litre, the common man has to pay Rs 65.60. How is it possible? When you impose more and more burden on the common people, it is interesting to note that the corporate tax has been reduced from 30 percent to 25 percent. You can say that GDP is high in India. How is the GDP better? You see that we have 100 US $ billionaires. It is in their presence that our GDP is high. Their assets value comes to one-third or one-half of GDP. So, if the number of such persons increases from 100 to 150, no doubt the GDP will be higher!

In the budget speech made by the finance minister in 2016-17, he announced that monitoring prices of essential commodities is a key element of good governance. A number of measures have been taken to deal with the situation. He also mentioned about the buffer stock of pulses, the minimum support price and incentives to farmers. Finally, he had stated that a sum of Rs 900 crore is allocated for market intervention. I want to know from the government whether this sum of Rs 900 crore has been spent. If yes, for what purpose the amount has been spent? If it has been spent, why there is no result in the market?

Lack of storage facilities caused big loss to food items as well as fruits and vegetables. It is reported that we lose about 35 per cent of fruits and vegetables due to the lack of adequate storage facilities. So, the Centre has to take the initiatives. The government should go for massive investment in agriculture sector. The government also has to intervene for having a better public distribution system. This House has passed the Food Security Bill. It is a very good Bill though we had some reservations. But it is not implemented in all the states. The states can implement it only if they get financial assistance and also adequate food grains from the Centre.

So, the need of the hour is to take very speedy action to bring down the prices. But, I am sorry to say, what we are witnessing is inaction, not action. If the government is not in a position to take action, no doubt it would give serious results and sometimes it would destabilise the system itself. We have had this experience during the tenure of the UPA government. Price rise was the main issue that we had highlighted during the election campaign and the NDA had also taken this issue to the people by saying that the UPA government failed to take any strong action to control price rise, and for that they had to pay a heavy price in the form of defeat in the election. Now, it is NDA’s turn. If you are not in a position to rise to the occasion to control the prices, no doubt price rise would dig the burial ground of this government because this issue is very important as far as this nation is concerned.

In the Rajya Sabha, Ritabrata Banerjee raised the issue of high prices of essential medicines in the absence of a pharmaceutical pricing policy. An estimated eight crore people are pushed below the poverty line every year because of forced expenditure on healthcare. According to the recent World Drug Report, 649 million people in India, the largest in the world, do not have access to essential medicines. An average family spends Rs 3,000 every year in buying medicines. The government must work out measures to ensure equitable access to quality and cheaper medicines.

The Upper House also took up discussion on making necessary amendments to various laws so as to abolish capital punishment and declaring moratorium of all death sentence executions. T K Rangarajan said our party fully supports the idea that death sentence should be abolished. The death penalty is a symptom of culture of violence, not a solution to it. More than 140 countries in the world have abolished the death sentence. This matter should be referred to the Law Commission and a full review must be done on this. Parliament should pass this resolution. After discussion, the resolution was rejected.

Legislative Bill

The Rajya Sabha passed the CAMPA Bill. Speaking on the Compensatory Afforestation Fund Bill, 2016, C P Narayanan said that while protecting the forests, protection should also be givern to forest-dwellers. We had enacted an act for them where gram sabhas were given certain rights. But very little has been done in various states to hand over power to the local bodies. The House also had a discussion on the status of implementation of the Andhra Pradesh Reorganisation Act, 2014. Sitaram Yechury said the government should fulfil the assurances given to Andhra Pradesh and Telangana. We had opposed bifurcation of the state. Promises were made that the revenue shortfall of Andhra Pradesh will be compensated, but no compensation has been given to the state so far.

The Lok Sabha passed the Institutes of Technology (Amendment) Bill to establish six new IITs and to upgrade the Indian School of Mines in Dhanbad to an IIT. While supporting the Bill, M B Rajesh thanked the government for fulfilling the long-pending demand of the people of Kerala for setting up an IIT in Palakkad. He said the most urgent need of the hour is to make IITs more inclusive. What are the challenges in making IITs more inclusive? The first one is fee hike. Now the IIT education has become costlier than education from some private institutions. So, we need to seriously think about this indiscriminate fee hike. The second most important issue is the flawed reservation policy. The government should ensure that the reservation policy is strictly implemented There is a need to implement the recommendations of Anil Kakodkar Committee for improving the quality and standard of IITs. The government should also ensure that democratic space and right to dissent and debate are protected in these centres of higher learning.

The Child Labour (Prohibition and Regulation) Amendment Bill, 2016 was passed in the Lok Sabha. Opposing the Bill, P K Biju said we have the largest number of child labour in the world. We wanted these children to come back to schools. How can we legalise this system of child labour? The Bill is also not in sync with the international labour law. This Bill puts a new category of person called 'adolescent', means a person between 14 and 18 years of age. That would affect the unemployed adults in the country because adolescent labour is cheaper. P K Sreemathi Teacher said the Bill, which appears to do away with the child labour up to the age of 18, has two caveats which would have the effect of legitimising child labour through backdoor and increase exploitation of children. Allowing children to work in so-called family enterprises would legalise at least three-fourth of child work which presently is unlawful.

The Lokpal and Lokayuktas (Amendment) Bill, 2016 was passed in both Houses of Parliament despite opposition from several parties, including CPI(M).

The Lok Sabha passed the Benami Transactions (Prohibition) Amendment Bill. Sankar Prasad Datta said we want that benami transactions of property should be totally stopped. We think some loopholes are still there in the Act. It is stated in the Bill that the confiscated properties will be vested with the central government. Instead, that should go to the state government concerned.

Other Issues

T K Rangarajan raised problems being faced by students in getting education loan in the Rajya Sabha and said education loan should not be equated with other loans. SBI has started selling its educational loans to Asset Reconstruction Companies which are threatening the borrowers. K K Ragesh demanded withdrawal of SBI’s decision to hand over default education loans to Reliance Asset Reconstruction Company.

Tapan Kumar Sen raised the matter regarding the reported move to privatise and push for strategic sale of several profit-making PSUs. BSNL and MTNL have also been brought into this net. The government must seriously review and reconsider it. If BSNL is privatised, there will be resistance all over the country. Ritabrata Banerjee raised the demand of a rehabilitation package for the Indian enclave-dwellers who shifted to Indian mainland from Bangladesh.