Asserting that there was no cause for panic as there were sufficient food stocks, the government blamed hoarding and speculative trading on the basis of reports of weak monsoon for the rise in prices of commodities like onion and potato and asked states to crack down on hoarders.

At a meeting of state food and consumer affairs ministers, it was decided to strengthen the Essential Commodities Act to make hoarding a non-bailable offence.

The ministers decided that the Centre will set up a price stabilisation fund to enable market intervention by states to tackle spike in prices of fruits and vegetables.

The NDA government had recently imposed minimum export price and put stock holding limits on onions and potatoes.

"There was a consensus that the Essential Commodities Act should be strengthened and more teeth should be provided to the law. The offences under the law should be made non-bailable," Food Minister Ram Vilas Paswan said after the meeting called to improve availability and cool pricing.

While Paswan blamed hoarders for the recent spike in prices, Finance Minister Arun Jaitley stressed that "there is no panic situation."

Jaitley, who along with Agriculture Minister Radha Mohan Singh also attended the meeting, said there was no scarcity of any commodity and the normal supply was disrupted by hoarders anticipating higher prices.

"We have sufficient food grains stock with the government of India to face to any kind of situation. Depending on where the shortfall or deficient areas are.... if such a situation arise, we are equipped to deal," he said.

Paswan said a proposal to make necessary amendments in the Essential Commodities Act would be moved for consideration of Cabinet in a week.

He also did not indicate the size of the price stabilisation fund being created or the time-frame within which it will be set up.

Stating that rise in food prices is seasonal during monsoon months of July-September, he said it was decided that at least one storage space would be created in all the 635 districts in the nation.

PTI