A survey of action taken by the state governments suggests that while most governments are under political pressure to control prices, few have actually taken proactive steps to do anything about them.
This is the case not just with the states ruled by the Opposition Bharatiya Janata Party (BJP) but also those ruled by the Congress and United Progressive Alliance (UPA) partners like the Left.
Delhi and Maharashtra are the exceptions. Midnight raids on retailers in both the states have made hoarders wary. However, by way of price and supply side management, there is little intervention in the two states.
The most candid confession of the limited options that governments have in controlling inflation came from Chhattisgarh Principal Secretary (Finance) D S Misra.
"There is no mechanism available with the state to control the price hike," Misra told Business Standard.
"All that the state can do is to check the black-marketing of essential commodities," he added. The Chhattisgarh government has not convened any meeting on this subject in the last three weeks.
The situation is no different in Punjab, which is reeling not just in the face of rising prices of food but also metals like steel. A spokesperson of the Ludhiana-based Apex Chamber of Commerce and Industry said steel prices were fluctuating around Rs 36,000 per metric tonne (PMT).
He said hike in the prices of steel after inflation was 27 per cent while that in edible oil was 21 per cent. While the state government was attempting to stave off the effect of food inflation, industry said it was steel prices that were going to affect the state's fortunes in the long run.
It wanted abolition of Customs duty on steel and increasing export duty so that export was discouraged. Steel traders were hoping that prices of the commodity would go up further. Kerala is one state badly hit by food inflation. The Kuttanad farmers meet the state's rice requirements.
But the state's granary, as it is known, lost more than 50 per cent of its paddy crop due to the extended summer showers, said an official source.
The area under paddy in Kuttanad has already diminished to around 37,000 hectares from the earlier 55,000 hectares. And with more showers earlier this month, paddy farmers have lost everything.
Sensing trouble if it doesn't act, the Kerala government has decided to intervene in the vegetable market to check the price rise.
According to Food and Civil Supplies Minister C Divakaran, the state administration will procure vegetables from within and outside the state through the State Horticultural Products Development Corporation (Horticorp).
The outlets would be run by Horticorp, Civil Supplies Corporation (Supplyco) and the State Cooperative Consumers' Federation (Consumerfed), and vegetables would be made available at subsidised rates, Divakaran told Business Standard last week.
Government agencies will open 200 vegetable shops across the state by next week to supply vegetables at subsidised rates.
The government is also moving towards procurement of paddy and selling refined rice through public distribution system (PDS) outlets at prices less than the existing rate of Rs 18 per kilogram.
It is expected that rice at PDS outlets would be available at Rs 14 a kg when this happens. Elsewhere, rice through PDS is available at between Rs 13 and 14 a kg.
In West Bengal, the government has utilised price rise as a way to beat the centre with. There is virtually no intervention by the state government, either against hoarders or profiteering.
The second half of April is likely to see widespread political agitations against price rise. Several states are also going for elections late this year. In anticipation, BJP-ruled states have launched schemes to sell rice at Rs 3 per kg. But this has fallen flat.
The Chhattisgarh government too has launched a scheme to supply 35 kg of rice per month to 3.4 million BPL (below poverty line) families for just Rs 3 per kg.
But "with the price of other commodities going up, a kilogram of rice for Rs 3 does not mean much for the poor now," admitted a senior BJP leader in Raipur.
All over the country, state governments are trying to cope with price rise, but with little real success.
