Can People Determine Prices of Essential commodities?


The Anti-corruption movement in India IAC (India Against Corruption) has started the process of launching a political party. A draft vision document and other drafts were released for inputs from public. Those opposed to IAC have naturally criticized these documents. Among these is a Party pamphlet titled ‘Political Revolution’ .The choicest abuses and criticism has been about a sub-section of the roadmap of issues targeted  by the party broadly laid out in 9 sub-sections. Sub-section 3 talks about tackling price rice and is sub titled “People will decide prices of essential commodities.”

Now how can People determine prices? what about market forces? Many such questions are being raised and abuses hurled such as anarchists, Stupidity, impractical, Utopian,  Do they know economics? and worse. Even the architect of IAC Arvind Kejriwal conceded on NDTV that perhaps the sub-title is misleading and may need to be re-examined when the draft is finalized.

Most of the abusers have not read the section and argument below the sub-title. There is no profound “Economics” argument here. The simple argument in the pamphlet is that the price rise is due to the acts of Government and policy in unfair deals with the private and foreign companies. Price rise can be controlled if the interest and consent of the people prevails in such  decisions. While the larger economic policy of  liberalisation is not discussed, liberalisation, growth and reforms cannot become excuses for crony capitalism and underhand deals between politicians and private companies.

A rough translation of the relevant sub-section is given below:

3. Mitigating Price Rise

People will decide prices of Essential commodities

Life has become very difficult for a common man today due to rising prices. The Government has deliberately kept the prices of many goods expensive to benefit large corporates. Corruption is directly involved in this. Essential commodities in the nation should not be expensive without the will of the people.

  1. Prices of petrol, diesel, LPG and gas cylinders can immediately be reduced. On one side the government has exempted big and rich companies from paying Rs. 13 lakh crores (1.3 million) in the past 3 years. On the other side the Government collects taxes on petrol and diesel to the extent of 2 lakh crores a year from the common man. Bravo Government!  It exempts the rich and sucks the blood of the common man. This has to stop. Petrol can be sold at Rs. 50/- per lit and diesel at Rs. 40/- per lit if the taxes of Rs 13 lakh crores were collected from the rich. There would also be no need to reduce the number of cooking gas cylinders per houselhold. People can be provided unlimited number of gas cylinders at Rs. 350/- per cylinder.
  2. 1250 cubic kilometers of underground oil reserves in Rajasthan have been given away to foreign companies at throwaway prices. These companies extract the oil at a cost of US$. 3/- a barrel and sell it to the Government of India at US$ 100/- a barrel. Why cannot the Government directly extract the oil? What is the need to allow foreign companies profit so much? If some of this oil is taken back from these companies and given to the people,the prices of fuel could be reduced further.
  3. The Sheila Dixit Government in Delhi has colluded with he private electricity distribution companies and increased the prices of electricity 100%. The opposition party BJP is silent on this. Both the ruling party Congress and the opposition BJP collude with the private electricity distribution companies. These companies make huge profits. In other states like Delhi where electricity distribution is privatised too, there is a need to drastically reduce the prices of electricity.
  4. In Delhi and many parts of the country water supply is being handed over to some foreign companies at throwaway prices. Wherever such privatisaion is happening, there is a need to cut the prices of water drastically.
  5. If the prices of petrol, diesel, cooking gas, electricity and water are reduced, the prices of other essential commodities would fall. Such a system will be created by which people’s consent will be needed to increase the prices of these.
  6. The Government has started speculative trading on every commodity. The prices of food grains, cereals, every commodity have become a gamble. The biggest reason for price rice, these deals will be stopped.

About Gunasekar C Rajaratnam

Social Entrepreneur, Guna has been working 28 years with market research and social research agencies and as an independent research consultant. Volunteers most of his time on social and public causes and has travelled extensively within India and has visited Africa. Trained as a barefoot manager, Guna leads a de-cluttered life of simplicity and personal Integrity and aims to be a 'Karmayogi'. He works with marginalised and rural communities and helps them set up sustainable enterprises in rural and urban areas. He holds these Positions: Director - Methodlabs Services Private Limited Co-Founder - Coworking Chennai Started as a freelance field data collector in 1985, grew up to a Senior General Manager in 1998 working for professional research agencies and as an Independent Research Methodology Consultant since 1998. He has designed and played a role in implementing a variety of research and analytic projects in retail markets, consumer behaviour, health, environment, social development, hard to reach communities and indigenous people. Specialities: Research Methodology, recruiting, training and managing large research teams, online collaboration tools, open source software, qualitative and quantitative research techniques, clinical and laboratory research practices and Knowledge management. Domain knowledge in Industrial diversification, marketing, retail markets, appropriate technologies, social development, health, sexual health, environment, urban wildlife, communities and indigenous people

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