"The government of India has conceded that the rise in prices was a result of its own policies and has now brought down the custom duty on cement, steel and few other consumer goods. The Centre has also directed its ministries to take necessary action in this regard. Thus, it is clear that owing to the wrong policies pursued by the government of India, inflation had risen to this level," she said.

The chief minister, meanwhile, has issued directives to all the divisional commissioners and district magistrates, asking them to keep an eye on the prices of essential commodities.

The officers have been asked to monitor the prices of the essential commodities and ensure that the traders were charging correct rate of tax under the VAT and that they were issuing bills.

The commissioners and the district magistrates have been asked to ensure that the traders did not charge tax on an increased rate and those found guilty should be booked under the proper legal provisions.

The officers have further been asked to monitor prices and if artificial shortage, stockpiling or incorrect realisation of taxes was detected, then punitive action should be initiated against the defaulters under the law. In such cases, action through the enforcement units of the related departments should also be ensured.

"The government is concerned that there has been an irrational rise in the prices of commodities of daily use and, in some places, VAT was being misused to charge increased prices. It is significant that after the implementation of the VAT, the tax rate on 436 commodities has decreased, while the same has remained unchanged on 1,376 articles. There was hardly any increase in the prices of commodities of daily use due to VAT," she pointed out.

The chief minister said that commodities of daily use including wheat flour, refined flour, semolina, gram flour, jaggery, khandsari, sugar, jowar, bajra, makka, jau, daliya, honey, lamps and lanterns using kerosene, have been exempted from VAT by the state government.

The tax rate on edible oils, vanaspati, refined oil, pulses, tea, kitchen utensils, matches, hosiery, milk food, sweets, namkeen, spices, jam, jelly etc. has also been decreased. On the remaining food grains, the tax rates have remained unchanged and, therefore, after the introduction of VAT, the prices of the commodities should have come down instead of going up.

It may be recalled that the Union finance ministry had requested the Cabinet Committee on Prices (CCP) that it should issue a notification and authorise all the related ministries to invoke Section 18 (G) of the Industrial Development and Regulation Act, 1951, to control prices of cement, steel etc.