ONCE again, the government’s promises on bringing price rise under control have proved to be hollow. Its assurances that inflation would come down to a tolerable level by December have been belied. And its hope that inflation would be around 5.5 per cent for the fiscal year as a whole is likely to be belied, too.
Dismissing the rise as a short- term one caused purely by a spurt in onion prices is disingenuous. Politicians and bureaucrats, of course, are adept in the art of making excuses and passing the buck. But even by their elastic standards, trying to pass off a serious structural problem which is eroding the quality of life of millions of poor and middle class alike is a bit too much to swallow.
India has a serious structural inflation problem on the food front, which has far less to do with seasonal crop failures or natural calamities and far more to do with skewed policies and abject failure of governance. Food prices have been rising continuously for over a year and a half and have been sustained at high levels thanks to hoarding, speculation and the government’s failure to intervene effectively to control prices, despite having a vast foodgrain buffer rotting in its godowns.
Policies preventing free internal movement of agricultural products have hurt producers and consumers alike. Lobbies have prevented modernisation of the supply chain and stymied the entry of foreign investment and organised competition into the sector. Union agriculture, food and civil supplies minister Sharad Pawar has not only been uninspiring in all three jobs, but has time and again helped talk up prices with his remarks. Without effective direction from the top, India is doomed to be a laggard in the global hunger rankings — despite being the world’s second biggest agricultural producer.
