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Monday, Aug 14, 2006

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Abolish forward trading: Karat

Staff Reporter

It is allowing speculators to push up prices, says CPI (M) leader

Prakash Karat

Bangalore: The Centre should do away with forward trading as it allowed speculators to `push up prices' and did not benefit agriculturists, Prakash Karat, general secretary of the Communist Party of India (Marxist), told a public meeting here on Sunday.

He wondered why national parties such as the BJP and the Congress did not demand this though they had admitted on several occasions that the booking of agricultural commodities months before the harvest was an unfair system.

Forward trading, along with continuous increase in oil prices, has had an immediate impact on inflation and led to soaring prices of essential commodities.

Stating that the Centre should revise its taxation structure on oil, Mr. Karat warned that "this Government will have to pay a political price for allowing oil prices to go up so much."

He said the Government policies were helping spurt in the prices of essential commodities, leading to the dismantling of the public distribution system (PDS).

"This collapse of the PDS is an assault on people's basic right to existence."

Criticising the Government's move to reduce foodgrain subsidy by Rs. 3,000 crores, he said private companies were procuring more foodgrains than the Food Corporation of India.

This increase in prices and reduction in quantity of essential items such as rice and wheat under the PDS were affecting people above and below the poverty line.

Special economic zones

Assailing the Centre for sanctioning more than 180 special economic zones (SEZs), Mr. Karat said that instead of equitable distribution of land, the Government was transferring land to powerful corporations, and small farmers in turn were getting a pittance for their land.

Capital gains tax

Alleging that the nation's economic policies were being held hostage by Foreign Institutional Investors (FIIs) and American interests, he said the Government was hesitant to introduce capital gains tax as the FIIs threatened to move out of India.

Explaining the impact of non-introduction of capital gains tax, he said, "a company at the Bombay Stock Exchange can make hundreds of crores and not pay a single paise of tax."

He criticised the Government's methods of raising revenue and said levying indirect taxes on public and disinvesting shares in profit-making public sector units were not the right ways of meeting budgetary deficits.

`Mining State subject'

Referring to Chief Minister H.D. Kumaraswamy's letter to Prime Minister Manmohan Singh on the Bellary mining controversy and suggesting nationalisation of the mining industry, he said mining was a State subject and the State Government had the authority to ban mining if it wanted.

"If the Chief Minister wants to stop mining, he can do it in a day. If he wants, we can show him the laws," he said.

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