Kremlin Limits Private Businesses : Soviet Union: In response to complaints of gouging, lawmakers authorize local governments to impose price controls on cooperatives.

The Soviet Union moved Monday to curtail the rapidly growing private sector of its economy by imposing price controls on what those businesses may charge for their products and services.

Responding to protests that entrepreneurs are taking advantage of the country’s severe shortages of almost all goods to charge ever-higher prices, deputies to the Supreme Soviet, the national legislature, voted to authorize local governments to set the maximum prices for consumer products and services of cooperative enterprises.

The lawmakers also voted to impose state price controls over all products made from government-supplied materials, manufactured as part of an order placed by a state agency or from state wholesale or retail outlets.

The legislation, in addition, would prohibit the private firms from selling imported goods, always scarce and widely sought, for more than what state enterprises are selling similar products for.

Taken together, the changes amount to a significant retreat from the economic principles of supply and demand that President Mikhail S. Gorbachev had declared would govern the “market socialism” that the country is attempting to establish.

The cooperatives’ freedom to set their own prices not only has been a major element of their rapid success but also, as the Soviet Union’s first substantial step toward price reform, it was an integral part of the original economic concept in their establishment.

The proposed changes, a compromise that has Gorbachev’s support, drew immediate warnings that many of the cooperatives might find it unprofitable to continue business at the lower price levels and decide to close, sending their customers back to the state stores, whose bare shelves make their lower prices irrelevant.

But proponents of the legislation, which is scheduled for final approval today, argued that the image of the new businesses, known as cooperatives although many are privately owned, has become so bad with their soaring prices that the groundswell of popular anger threatens to engulf the whole reform program.

Anatoly Sobchak, a liberal deputy who help draft the legislation, said the new restrictions would “make it possible to keep cooperative associations intact and at the same time eliminate profiteering.”

People’s faith in the fairness of the law, as well as in the reform program, was at stake, Sobchak said, arguing for what he called “limited measures” to control the problem of profiteering.

During Monday’s tumultuous debate, conservative lawmakers again accused the cooperatives of robbing the working class through their high prices, of aggravating the country’s serious shortages by pulling goods and raw materials out of the state sector of the economy, and of reinstituting capitalism.

“The law establishing cooperatives has created social inequality again in our country,” Valentina Shevchenko, president of the Ukrainian republic, told the Supreme Soviet. “It has devalued honest work.”

While many workers were demanding their immediate abolition, she said, the government at the very least should impose the same taxes and fees on them that state enterprises now pay.

But Andrei D. Sakharov, the nuclear physicist and human rights campaigner, strongly defended the cooperatives for the new vitality they have already brought to the Soviet economy and for the market concepts they are introducing here.

“Changing the law on cooperatives is unacceptable,” Sakharov told the session. “All of the changes will be detrimental in the end to the cause of perestroika (restructuring). Other laws are also not perfect, yet there is no cry for amending the law on state enterprises.

“The answer lies in putting all state enterprises and cooperatives on equal footing and letting them compete so that finally we move toward the cooperative system as the norm for the country.”

In one of Gorbachev’s most important economic reforms, individuals were permitted beginning in 1987 to set up small business--alone, with relatives or friends, or later with employees--to provide goods and services that the Soviet Union’s state-run economy could not.

The cooperative movement has grown dramatically in the past two years. There are now 2.9 million people working in more than 100,000 cooperatives, more than twice the number of employees as at the beginning of the year. The cooperatives’ turnover in the first half of 1989 totaled $19.8 billion, more than twice that for all of 1988 and already over twice the peak forecast for 1990.

The new restrictions are aimed primarily at cooperatives in the retail and wholesale trade but are so written as to apply to virtually any since all depend to some extent on purchasing raw materials or other supplies from state enterprises or compete head-to-head with state enterprises.

Critics of the legislation demanded to know how those forced out of business by the price controls would be compensated, but they received no answer.

The government’s own economic legislation has meanwhile encountered opposition from both radicals and conservatives--and from centrist deputies who criticize it for not having been thought through.

A key bill on defining “property”--what it is, who may own it, what their rights are--was sent back to the Supreme Soviet’s commissions Monday for further review and drafting after deputies said that agreement had not been reached on many important elements.

The deputies then rejected another major bill providing for regional economic autonomy.