Prime Minister Modi to Personally Monitor Pulse Prices

· I-T Raids on Brokerages, Traders in 4 Cities to Check Pulse Hoarding

· Seized Stocks Rot in State Government Warehouses as Price Threatens to Rise Again

· No Attempt to Outsource Farming in Land Surplus Tanzania which accounts for 27% of Tuar Dal Imports into India

The Income-Tax (I-T) department on Tuesday searched and raided the offices of select commodity importers and traders to check the unusual spurt in profits and cash flow through alleged manipulation of pulse prices.

More than 57 places were raided in New Delhi, Mumbai, Indore and Chandigarh. At some places, like the National Commodity and Derivatives Exchange (NCDEX), raids are likely to continue till Wednesday.

Top officials of the ministry of consumer affairs and food ministry said that the raids were an outcome of a strong commitment and recommendation from the PMO.

It is alleged that trading houses hold stocks and delay imports.

A senior I-T official told DNA: “The shortage of pulses, especially tur dal, across major markets in the country, triggered the raids. Despite visible increase in supplies through imports, retail prices failed to dip below the Rs 200-plus mark.”

In Mumbai, searches were conducted at NCDEX, commodity brokerages and their parent outfits of ETG Commodities, Edelweiss and Glencore India.

“One of the main reasons for the NCDEX search was to shortlist the data of traders indulging in speculative trading of pulses and delivery thereof,” said an I-T source.

“We are looking at tax evasion on incomes, probably gained through manipulation of dal prices,” said a tax official. (How is the income tax concerned with price manipulation as long as dal sales are accounted for. This is a VAT free item for which full account of movements is available. Full detail of import quantity and price is published by all the ports. These can be accessed by the PM himself to study the gap between import and retail price).

PMO officials and the cabinet secretariat had discussed with the inter-ministerial group of ministry of consumer affairs and the food ministry in the second week of December to clamp down on price manipulation.

The trigger point of the raids was the failure of earlier measures to curtail prices. Food Corporation of India (FCI) and National Agricultural Marketing Federation of India (NAFED) failed to procure pulses on minimum support price (MSP).

In Maharashtra, traders have rejected the offer of procurement agencies. Traders neither sell nor provide the farmers’ list to FCI, NAFED and Small Farmers’ Agriculture-Business Consortium (SFAC).

The central government had issued an advisory to states to take strict action against hoarding and black marketing in July 2015. State governments have conducted 14,721 raids and seized 1.3 MT pulses.

The government has extended zero import duty on pulses till September 30, 2016. It has also extended stock limit till September 2016. Still, there is no significant impact on prices. It may be time to subsidize imports on the lines of similar action by countries like Pakistan.