Retail prices of onions have fallen to Rs 5 -10 per kg in major metros across the country following raids by income tax officials in godowns of onion traders in Uttar Pradesh.
Earlier, 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.
On Friday, the officials conducted raids in Kanpur and Lucknow in Uttar Pradesh to check the skyrocketing prices of onion in the local markets as many traders are holding back their stocks of the vegetable to gain profits.
The officials who had conducted the raids at various onion godowns said that the investigations are underway.
"Right now, we can only say that the investigations are underway and it will continue till evening," A.K. Agarwal, inspection officer, said.
Meanwhile, onion traders appeared unhappy with the raids and added that the raids were unnecessary.
"The shortage of onions has not got anything to do with the Kanpur vegetable market. Onions have been destroyed in Nashik due to which a shortage is being felt all across India hence there is no need of an investigation to be carried out here," said Sumit Tiwari, onion trader.
The income tax officials were detained by the onion traders in Lucknow, and had to be rescued by the local police.
The income tax department has become vigilant and is carrying out surveys at all storehouses of vegetable traders to check hoarding. The steep hike in onion prices has forced many middle-class families to skip onions in their daily menus.
Irregular rains and export of the vegetable are reasons that onions in the wholesale market were being sold in the range of Rs 250 (5.52 dollars) for five kilograms before reaching retailers, who would sell it at about Rs 80-100 (1.76 to 2.20 dollars) per kilogram.
The Government has been facing sharp criticism by the opposition and common people for its inability to keep the prices of essential commodities under control. An alarmed government has enforced a ban on exports of onion and removed duty on imports.
The Government also found itself in fresh difficulties after Pakistan called for a complete ban on the exports of onion on January 5 through the land route via Wagah border in India''s northern Punjab, as now prices are expected to rise further.
However, the Government has assured that it had initiated talks with Pakistan on the issue of ban on export of onions to India.
The country’s apex fair trade watchdog, Competition Commission of India (CCI) has already instituted an inquiry into the rising prices of onions.