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A stage has reached now, where the Finance Minister cannot fool the people any longer and conceal the fact that we are faced with spiraling inflation. Instead of taking the bull by the horns, the Finance Minister, the Prime Minister and the Dy. Chairman of the Planning Commission are making pious statements that it would take a couple of weeks before the inflation would come under control and the prices of food grains would fall, least realizing that the world prices of food grains are far higher than the ruling prices in India. The World Bank and the Food & Agricultural Organization (FAO) have just met to evaluate the shortage in food grain production world-wise and the steps the Member Countries have to take to meet this crisis so that famine could be averted in some of the countries facing food shortages. This is not to mention that famine conditions are already existing in certain African countries. The first thing that one has to recognize, as a recent study revealed (published in the Financial Express) is that the prices of various commodities which are factored while computing the WPI, have not been updated for quite sometime. Therefore, the WPI as published now does not reflect the correct picture. Further, the volatility in fuel prices and its effect on other products have not been built into the WPI. In the WPI as published now, the weightage given to the fuel group, which includes power, light and lubricants, is 14.22%. The weightage given to primary articles and manufactured products is 22.02% and 63.74%, respectively. Increasing the weightage to the fuel group in WPI is expected to result in higher inflation figure, which has been a key concern of both the Government and the Reserve Bank of India over the past year. An increase in fuel price with a higher weightage for the fuel group will have a larger impact on all commodities in general and the rate of inflation in particular, compared to its impact in the earlier series. Once this correction is made it would reflect the real impact on over all prices induced by the increase in fuel prices. Though the Planning Commission was aware of this fact, this correction has not been carried out, though between 1993-2004 the prices of the products falling in the fuel group have increased exponentially. As of today crude is being quoted at 135 $ per barrel. If shortage in cereals, pulses and other food grains along with the increase in oil prices is factored in, not only the WPI but also the CPI would increase considerably. I expect WPI would be above 10% and the CPI would be at least 15%. The Consumer Price Index is a measure of essential goods and services consumed by urban non-manual employees, industrial workers, farm and rural labour at the retail level. In the current trend of rising prices, WPI and CPI would give two different scenarios of inflation. The WPI by ignoring goods and services of mass consumption tends to distort the price situation. Within the CPI matrix, there is a need for inclusion of new goods and services like healthcare, nutrition, transport, trade, insurance etc., which have an impact on an average consumer, since the cost of such services have increased considerably in the last few years. Then only it would be closer to the ground realities of peoples’ consumption pattern. All the steps taken till now (though belated, which should have been taken in the Budget itself) are not enough to meet the crisis being faced not only by the Government but by the country itself. I have not come across a single step taken by the Government or any policy statement by anyone, including the opposition, which is ‘Statesmen’ like to meet this grave crisis. I am reminded of Lal Bahadur Shastry the diminutive, but a great Prime Minister who made people voluntarily give up one meal in a week particularly on Monday, to meet the food shortage in the country. He suggested this step particularly when the United States threatened that they would not make wheat shipments to India even against payment. This small suggestion of Lal Bahadur Shastry was a giant step which was whole heartedly supported by the people and this self discipline was enough not only to meet the food shortage in the country but also to send the message to the whole world that people of India are not only patriotic but can meet any crisis on their own terms. It is sad that no such statement has been made either by the Prime Minister, President of any National or Regional parties, or for that matter any one from the opposition. When a country faces war or any other grave crisis, the opposition functions in tandem with the Government in meeting the crisis and not take advantage of the situation as political opportunists. Even now it is not late, if some of the steps are announced by the Prime Minister to control the spiraling inflation. He cannot any longer leave the situation in the immature hands of the Finance Minister but take the lead and if necessary form a Group of Ministers exclusively to deal with the situation. In a vibrant and functioning democracy it is necessary for the Prime Minister to take along with him not only the alliance partners in the UPA but those parties sitting in the opposition. To revive the Public Distribution System (PDS) and supply rice, wheat, etc., from the godowns of the Food Corporation of India (FCI). Increase procurement of rice, wheat and other cereals by the FCI. Announce the procurement price after proper study, so that the farmer gets the right price for his produce. Introduce in all cities and major towns ‘Ryot Bazaars’ on the lines introduced in Andhra Pradesh so that middlemen are eliminated between the farmer and the consumer. The State Governments have to take initiative immediately. Since, wheat and rice have been harvested, Government servants, PSU employees, and even those working in the Private Sector should be given three months pay to purchase their requirements of food grains in wholesale so that the farmer gets the right price and the consumer gets at a reasonable price. This is done by most of the families in Gujarat. Import food grains particularly rice from countries like Thailand and other countries in the Asia Pacific Region so that the price rise can be checked. Similar steps should be taken for importing edible oils from Indonesia and Malaysia. An appeal should be made not only by the Prime Minister but all the leaders at the national level to give up - One meal in a week, preferably on a Monday. The restaurants and hotels should also be requested to close on that day. As far as possible, people should use public transport or share / pool their vehicles to go to their work places. It is time, like in China, to use bicycles to go to schools / work places. People should voluntarily stop using their vehicles atleast twice in a week, to reduce consumption of petrol. Use of alternate energy sources, should be encouraged and should be exempted from all taxes. In fact, like in Israel use of Solar Heaters should be made compulsory for hotels, existing as well as all new buildings. Since some of the petroleum products such as LPG, LNG are imported, the households should voluntarily reduce their consumption. Energy audit should be conducted in factories, industrial establishments, hotels, public buildings, private offices and other places where power is consumed on a large scale. Out dated furnaces should be replaced with fuel-efficient furnaces. This will help wastage of power and reduce power consumption. The use of ordinary electric bulbs should be discouraged by increasing the levy of Excise duty on such bulbs and the Excise duty on fluorescent tubes and lights should be reduced and their consumption encouraged. The price of crude is increasing day by day resulting in enormous losses to the refineries and the PSUs distributing petroleum products. It should be remembered that having administered prices is actually helping the rich and not the common man who rarely uses a vehicle. It is therefore necessary to take a courageous decision to increase the price of atleast some of the petroleum products. In addition, many other constructive steps could be taken and the Government has to be proactive in this aspect. It is therefore, necessary for the UPA Chairperson and the Prime Minister to emphasize on each Minister that his / her performance would be judged on the steps taken by them and the results achieved. Some of them could be : The Armed Forces, the Paramilitary Forces and the State Police Forces, (particularly, the Special Armed Reserve) should be encouraged to plant trees within the Cantonments, Military Farms, Camps and Offices. This would be the right season as the monsoon is fast approaching. The Railways can take similar steps not only at the Railway Stations but along the track also, since they have large tracks of land at their disposal. The Central Government have a number of offices around the country and each Ministry should be directed to take steps to plant trees within their premises. The C.P.W.D. should be directed to plant trees along the National Highways. In fact this should be made compulsory while awarding the contracts. Similar steps should be taken by the State Governments and the State P.W.D, the Municipal Corporations and the Local Bodies. No additional budget should be granted for carrying out the above programmes and each Ministry / Department should carry it out within their resources. NGOs should be encouraged to undertake social forestry in urban and rural areas. This programme can be undertaken in colleges and schools, run by the Government and Private establishments. This will have some effect on global warming. As a revenue generating measure, organizations like the Railways, P & T, Civil Aviation, etc. should utilize the surplus land available to them to build shopping complexes, or lease out premises for commercial purposes close to the public utility, so that the people can utilize the facility resulting in generation of additional income to the Government. The people of India are patriotic and in a crisis they have shown in the past great perseverance, zeal and national unity. If the Prime Minister appeals to their conscience, they will rise to the occasion and stand solidly behind him so that the impending crisis can be met. If immediate steps are not taken the present crisis will lead to social unrest and may result in the breakdown of law and order.
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