New Delhi: The CPI-M has said that the government has not fulfilled its assurance to examine the demand to prohibit speculative trading in essential items as it would dampen massive profit generation by corporates.
The major Left party, which has been seeking a ban on futures and forward trading in foodgrains and other essential commodities for long, said even after demands were made in Parliament on the issue, the rise in the prices "continues to eat into the living standards of the people".
Despite Finance Minister Pranab Mukherjee assuring that the demand would be examined and, if necessary, such a step would be taken at least temporarily, "nothing substantial has happened on this score", CPI-M Politburo member Sitaram Yechury said.
"This is not surprising since such a measure would directly dampen massive profit generation for speculative trading corporates," he said in an editorial in the party organ `People`s Democracy`. Demanding an immediate ban on futures and forward trading in essential items, he said the CPI-M`s contention that speculation was a major cause of price rise had been vindicated by a UN report.
"If the interests of the `aam admi` have to be protected and the unanimous sentiment of Parliament respected, then this UPA-II government must immediately ban all speculative trading in the commodity exchanges," he said. "In a sense, a resounding vindication of our position has now come in the report of the UN special rapporteur on the right to food" who reports directly to the UN General Assembly, Yechury said.
The CPI-M leader said the volatility of the prices of basic food commodities and the global food crisis of 2007-08 and 2008 was blamed on speculation in this report. He quoted the report as saying that "a significant portion of the increases in price and volatility of essential food commodities can only be explained by the emergence of a
speculative bubble. The particular area of concern is speculation in derivatives based on food commodities".
Global financial institutions that went bankrupt, like Lehman Brothers and Morgan Stanley, were speculating in foodgrains, according to the UN report. "It is precisely such a tendency that is happening in India which has contributed to this unprecedented rise in
prices," Yechury said.
The cumulative value of trade in agricultural commodities from April 2009 to January 2010 grew by a whopping 102.59 per cent, in absolute terms worth over Rs 10.13 lakh
crore, he said, adding that the people were paying higher prices to feed such profits.