Inflation fears back as truckers strike continues

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Inflation may touch 10% by end MarchInflation up at 0.83% on higher food pricesHoarding drives food inflation by 16.32%Inflation a matter of concern: FM

New Delhi: Even as the country’s premier think tank National Council for Applied Economic Research (NCAER) warned that continuation of the truckers’ strike—which began on Monday—would result in higher inflation, the protest is hurting several sectors, including exporters who are already reeling due to the global slowdown.

Pointing out that as the daily movement of goods worth around Rs 1,400 crore has started getting affected due to the strike, Federation of Indian Export Organisations (the apex body for exporters) has written to shipping and transport minister TR Baalu to find an amicable solution to the matter.

“If there is a delay in shipment of goods by more than 4 days, foreign buyers will push us to send the cargo by air, which is five times costlier. If the strike goes beyond 10 days, such a delay will result in cancellation of orders. As it is we are suffering due to demand slow down in the West,” FIEO president A Sakthivel said.

According to NCAER, if the truckers’ strike goes on for over four days, inflation can go up by 50 basis points due to shortage of perishable goods like milk and vegetables and panic buying by traders.

The government was relieved as inflation had fallen to a 10-month low at 6.38% for the week ended December 20, after touching a 16-year high of around 12.63% for the week-ended August 9.

The government threatened to cancel the permits of agitating truckers and invoke the Essential Services Maintenance Act. It even partially accepted the demands of the agitating truckers by exempting eight services provided by sub-contractors to transporters from payment of service tax. But all these failed to put an end to the strike.

All India Motor Transport Congress (AIMTC) had called the strike demanding a reduction of diesel prices by Rs 10 per litre and exemption from service tax.

The truck operators are also demanding uniform 4% VAT on diesel, scrapping of registration and return filing clause in the new Carriers Act, reduction of tyre prices by 30-35% and rolling back of national permit fees from Rs 5,000 to Rs 1,500.

While the road transporters are adamant not to call of their indefinite nationwide strike, the government is making efforts to ensure free flow of essential commodities to minimise the inconvenience to the general public owing to the transporters’ strike.