Prime Minister Narendra Modi Thursday ordered a crackdown on hoarders and an advance plan on farm output in event of a poor monsoon that has added to the government's worries weeks before it presents its maiden budget.
India continues to fret over the possibility of a dry season, with summer rains short by 41%, so far. The metrological department has said there was a likelihood that the monsoon, which has been sluggish, will gather pace after first week of July.
"The Prime Minister said states should set up special courts for speedy trial of hoarders and black-marketeers," an official statement said after Modi reviewed the status of the monsoon at a high-level meeting attended by home minister Rajnath Singh, finance minister Arun Jaitley, agriculture minister Radha Mohan Singh and food minister Ram Vilas Paswan.
"Prices are rising due to hoarding and black-marketeering...The NDA government will not tolerate hoarding and corruption," Paswan said.
He also said state governments have been given three months' time from July 4 to implement the food security act that entitles two of three Indians to cheap food grains. Only five states have fully implemented the law, while six have had a partial roll-out.
To tame potato price and boost local supplies, the government has set a minimum export price (MEP) of $450 per tonne (Rs 27,045), following up on its last week's decision to raise the MEP of onions.
Modi has asked for an advance action plan, with districts, rather than states, being the unit of planning.
The agriculture ministry has prepared a contingency plan for more than 500 districts if rains remain below average. Sources said inter-ministerial discussions have begun on relief measures such as subsidised diesel and rescheduling of loans for the drought-hit.
"There is sufficient grain stock. More than 13-lakh kg of seed of short duration crop is available. The states have adequate fund to buy them," Radha Mohan Singh told HT.
The PM has also asked the government to beef up the National Rural Employment Guarantee Act scheme as it might be required to generate employment.
Plentiful rains are critical to replenish water bodies and also to boost farm output and incomes, which drive up demand for goods. India's economy grew by 4.7% in 2013-14, marginally higher than previous year's 4.5%. This is the first time in 25 years that India's growth will end up below 5% in two successive years.
Soaring food prices pushed wholesale inflation to a five-month high of 6.01% in May. Food inflation, a measure of how costly the platter has become over a year, is galloping towards the worrisome 10% mark. It was 9.50% in May.
It could get worse because of the possible El Nino effect, a weather glitch in the Pacific Ocean that causes extreme weather -- droughts in the sub-continent and floods in Latin America.