High prices in NE: Panel blames it on supply chain hiccups and transportation cost

Staff Reporter

GUWAHATI: The standing committee on consumer affairs, food, and public distribution 2024-25 has pointed out that the disruption of the supply chain from time to time, the cost of transportation and logistics, and damage due to heavy rains, besides the bandh culture, are the reasons behind the rise in prices of essential commodities in the northeastern states.

The parliamentary standing committee for the Ministry of Consumer Affairs, Food and Public Distribution said this in its first report tabled in the Lok Sabha in December 2024. The committee made it a point that the Northeast has consuming states rather than producing ones, and such the prices in the former states are higher than the prices in the latter ones due to the cost of transportation and logistics.

The committee also notes that normal life of consumers in the northeastern region is often marred by recurrent bandhs and strikes. However, there is no impact study on such bandhs and strikes, the committee said. As a result, prices of essential commodities see an abnormal increase in the region. Besides slight disruptions in the supply chain or damage due to heavy rains, there is a spike in prices of agri-horticultural commodities.

The committee wants the central government to take up the matter with a view to bringing about positive changes in the interest of the consumers living in the Northeast.

In its reply to the committee, the Central Government said that prices of agri-horticultural commodities are volatile and tend to get affected by several factors, such as mismatch in demand and supply, seasonality, supply chain constraints, artificial shortage created by hoarding and black marketing, rise in international prices, geopolitical tensions, etc. Conversely, bulk arrival and logistics problems have the potential of creating a situation of glut in the market and a resultant dip in retail prices, the report quoted the government as saying.

The government takes various measures from time to time to augment domestic availability and stabilize the prices of essential food commodities. These steps, inter alia, include releases from the buffer to cool down prices, imposition of stock limits, monitoring of stocks declared by entities to prevent hoarding, and also requisite changes in trade policy instruments like rationalisation of import duty, changes in import quota, restrictions on exports of the commodity, etc., the report said.

State governments, including NE States, have been requested to implement a state-level Price Stabilisation Fund (SLPSF) for intervention to control price volatility by availing funds for the PSF scheme. Funds from the PSF schemes are provided to the northeastern states for setting up state-level PSF Corpus on a 75:25 sharing between the Centre and the state. Till date, two states in the Northeast, Assam and Nagaland, have been sanctioned state-level PSF corpus funds of Rs. 200 crore and Rs. 100 crore, respectively, the government said in its reply to the standing committee.

Also read: Assam: CPI(M) decries price rise of essential commodities and of life-saving drugs

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