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“Our agriculture markets
are characterised by market imperfections...A huge gap
exists between the consumer price and the price received
by primary producers...While farmers do not get
(remunerative) prices, consumers end up paying more than
what should be paid if agriculture markets are
competitive and efficient,” Mukherjee said at a seminar
on competition law organised by the Confederation of
Indian Industry (CII).
The country is reeling under the impact of steep 13. 68
per cent rise in a number of food products pummelled by
a supply crunch in staple items such as pulses and
potatoes.
Official price data based on the wholesale price index (WPI)
released on Thursday showed that prices of potatoes have
doubled during the one-year period ending October 31,
2009, while onions were costlier by 42.58 per cent.
There is a chain of intermediaries, which do not always
work competitively in the agricultural markets,
Mukherjee said.
“There is tremendous scope of increasing competition in
the (farm) market to formulate policy changes and
innovate products which in turn would contribute to
farmers as well as consumers,” he said, adding that
despite low inflation food prices have been on the rise.
Mukherjee also said that there was enough liquidity in
the banking system for private industry to borrow
despite the government borrowing programme of more than
Rs 4.51 lakh crore this year.
He also said government today said the proposed Goods
and Services Tax (GST) would help set up a common market
across the country. “Proposed GST would help achieve
common market for goods and services at lower tax rates,
avoiding cascading effect of these taxes,” Mukherjee
said.
The new regime is aimed at removing distortions in the
indirect tax regime that is currently mired in a web of
levies such as excise, value added tax and service tax
and various surcharges and cesses.
Source :
Hindustan Times,
India,
dated
16/11/2009
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