Shortages of essential commodities and ever increasing food prices are making miserable the lives of citizens in India, especially those in the lower income group. The only redeeming feature is that people at the lowest rung of income are protected to some extent through government-subsidized supply of foods to them. No one responsible in the country seems to have any clue regarding this sudden developments though the errant monsoon is being blamed. Here is what the apex bank in the country has to say on this issue as reported by the media.
"India's policy makers can't ignore the link between higher food costs and inflation, central bank Deputy Governor Subir Gokarn said, signaling the monetary authority may quicken measures to curb the increase in prices.Gokarn is the second official in as many days to flag concerns over accelerating inflation after Prime Minister Manmohan Singh's economic adviser on Dec. 3 said rising food prices may "require monetary policy action." The wholesale food-price index climbed to an 11-month high in November, a government report showed this week. "Persistently rising food prices may spill over into inflation expectation" and "do have an expectation impact," Gokarn told reporters in New Delhi today. "We can't ignore that linkage." India's gross domestic product expanded 7.9 percent in the three months to Sept. 30 from a year earlier, the fastest pace in six quarters, as a $130 billion cash injection through monetary stimulus shielded the $1.2 trillion economy from a global recession. China grew at a faster pace of 8.9 percent last quarter, while U.S. GDP rose 2.8 percent, Europe contracted 4.1 percent and South Korea increased 0.9 percent".
While the debate goes on, there does not appear to be any relief to the common man from the increasing economic burden arising out of the illogical and irrational price escalation for almost all food materials including staples. If a 15% drop in the rainfall during the last monsoon can cause such a havoc, what, if monsoon fails again? The recent announcement by GOI declaring its plans to import 4 million tons of sugar is bound to increase international price of sugar which will have a snowballing effect in the domestic market.
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