Thursday, December 12, 2013


That food inflation is a dangerous development for the ruling political class is reflected by the statement of the Finance Minister of GOI who rued the other day that government has to pay a price for not reigning the inflation for a long time. During the last 10 years the UPA was in power and somehow it took it for granted that the "people" would continue to "love" them because of its propensity to waste public funds on distributing freebies through one program or the other. Who will forget the soaring prices of Onion during the last one year and the government making only noises without doing any thing substantial to correct the situation. The election results have proved conclusively that electorate cannot be taken for granted and people have thinking heads on their shoulders to discriminate between what is good and bad for them. It is to the credit of the Parliament to forewarn the government about the fatal consequence much before the elections which was not heeded because of the arrogance of power among the ruling party leaders. Here is what the Parliament Standing Committee on finance had said on inflation. 

"Parliament's standing committee on financehas pulled up the government for failing to curb inflation and inflationary expectations due to lack of appropriate intervention in the market and asked it to formulate a comprehensive food management and pricing policy. The committee, headed by senior BJP leader Yashwant Sinha, has asked the government to expeditiously create a food price index to truly reflect the price movement of essential food articles. "The government should formulate a comprehensive food management and pricing policy in coordination with states so that food inflation is effectively checked and price stability becomes a reality," the panel said, pointing out that the existing system of food management was beset with corruption and full of leakages. The indictment comes at a time when Congress' debacle in the recent assembly elections is being blamed partly on high inflation. The committee has also asked the government to remain alert to the possibilities of shortages and supply constraints developing in the market and formulate its response with alacrity so that consumers do not have to bear the brunt of price-spiral. The current system has failed to provide relief to the common man from unabated rise in the prices of essential commodities, the panel said in its 81st report on the action taken by the government on its earlier report on inflation and price rise."

It is very true that the GOI prefers to use wholesale price index (WPI) in stead of consumer price index (CPI) to camouflage the seriousness of the situation which amounts to fooling the public. In real terms CPI tells clearly how far the citizens are affected by uncontrolled price increases for many of the daily essential food items so that GOI can feel the sufferings of the public, if it wants to! On one hand GOI comes out with policies like loan waivers, supply of foods to the so called "vulnerable" groups at laughably low prices, free electricity to farmers, minimum support price for agri commodities etc but ultimately if these beneficiaries have to pay intolerably high prices for other "goods" needed for a decent living. advantages of all freebie programs is more than neutralized! 
Will the GOI wake up and think of holistic policies that bring cheers on the faces of millions of poor and famished people of this country? Probably a cry in vain?  .


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