Onion prices on Friday eased by Rs 5-10 a kg in major metros following raids on traders by income tax (I-T) authorities in several states like UP, Tamil Nadu, Punjab, Haryana and J&K. As the I-T officers were swooping down on big onion traders, cabinet secretary K M Chandrasekhar is believed to have told state chief secretaries through a video conference to put the local taxes like octroi and mandi levies on hold for three months on vegetables.

The retail prices of onions declined by Rs 5-10 per kg to Rs 60 in metros across the country, both because of the heat on traders and reports of beginning of fresh arrivals of crop from Gujarat. The Centre finally agreed to compensate agri-cooperatives Nafed and NCCF for losses on selling the vegetable at Rs 35 per kg in Delhi. Finance minister Pranab Mukherjee wrote to chief ministers to crack down on hoarders to ensure smooth supply of essential items from farm gate to retail customers. Food inflation has touched a high level in more than a year at 18.32% for the week ended December 25.

“A larger part of price rise is due to the widening gap between the wholesale and retail prices and the growing demand for these products due to rising income levels,” Mukherjee said. .

I-T officials raided wholesale onion dealers across UP. “The raids were conducted in Lucknow, Varanasi, Kanpur, Ghaziabad, Bareilly, Meerut and other places of the state at main dealers of onion,” a senior I-T official said. Similar operations were carried out at over 10 wholesale merchants across Punjab, J&K, Haryana and Chandigarh in a move to check hoarding.

In Tamil Nadu too, traders came under the IT scanner with the department carrying out state-wide “survey operations”.

“In this operation, 10 big vegetable traders are covered and they are being questioned about the profit earned in their business especially due to increase in prices and investment made by them in the recent times,” S Ravichandran, additional director, I-T (Investigation), Chennai, said.

Meanwhile, India has initiated talks with Pakistan seeking resumption of onion imports through land route of Wagah border where 300 trucks were stopped on Thursday from crossing over to the Indian side. “We have initiated talks and we are hopeful that we will find a solution,” external affairs minister S M Krishna said. In a retaliatory move, Amritsarbased exporters refused to send to Pakistan trucks carrying tomatoes and other vegetables.

TIT FOR TAT: Hundreds of tomato-laden trucks get stranded at the Attari-Wagah border on Friday after Indian exporters refused to export vegetables to Pakistan in protest against its ban on onion export.

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