A series of Income Tax (IT) raids on Onion traders in Nashik district of Maharashtra has resulted in bulk prices dropping down by about ₹1,000 per quintal in the area’s agricultural produce marketing committee (APMC) yards over the past two weeks. Prices have fallen by at least ₹200 per quintal in the last four trading sessions.
Price effects
The raids have roiled Onion markets in Maharashtra, which produces 33% of the country’s Onions and is home to Asia’s largest onion market in Lasalgaon. Onion prices, which had been hovering around ₹3,850 per quintal, have now dropped to ₹2,900 in the Pimpalgaon APMC yard.
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On October 18, the modal price (the price at which the majority of trades occur) for onion in Lasalgaon was ₹3,100 per quintal and ₹3,125 per quintal in Pimpalgaon (Basawant). However, after the raids began on October 21, prices fell the following day to ₹2,850 in Lasalgaon and ₹3,001 in Pimpalgaon.
The modal price of golti onion in Pimpalgaon fell to ₹2,100 per quintal on Monday (October 25), while other onions remained stable at ₹2,900 per quintal.
On October 21, the IT Department raided ten onion traders in Pimpalgaon (Basawant) in Nashik district. According to sources, search operations are still ongoing.
The IT Department said in a press release issued Monday evening that it had initiated search and seizure operations in the premises of a person engaged in real estate business, mainly operating as a land intermediator in Nashik.
‘As of now, unaccounted cash totaling ₹23.45 crore has been seized,’ the statement said, adding that unaccounted income totaling more than ₹100 crores had been discovered.
There was no official statement from the onion traders’ association. ‘We don’t want to comment on this,’ said Nandkumar Daga, President of the Lasalgaon Onion Traders’ Association. Other Nashik onion traders preferred to remain silent.
More on the way?
IT raids, according to Lasalgaon APMC officials, have helped to stabilize Onion prices in the market. Onion prices have fallen since the search operations began, and they may fall further as traders offload the stock.
‘In addition to natural disasters, there are many players in the Onion market who determine price rises and falls. For starters, Onion farmers are banding together and taking control of supply. Traders hoard in order to capitalize on the shortage. For many years, a group of Onion traders dominated the market. Hoarding is still a major issue, and IT department action is aimed at traders to get them to release the stock as soon as possible.’ according to a market analyst in Nasik.
The government’s response
It’s not the first time the IT Department has raided onion vendors. As supply decreased, the wholesale onion price at Lasalgaon reached ₹5,000 per quintal in October of last year. The IT department conducted a series of raids in Nashik, resulting in a drop in onion prices. Traders then threatened to boycott auctions, claiming that the government was out to get them.
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According to market participants, the government wants to ensure that onion prices remain stable during the Diwali festival and that there is no public backlash.
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