Speaking in Parliament on March 5, the Prime Minister gave three reasons for the price rise: global recession, a hike in world commodity prices and drought. Recession has brought down the oil prices from $148 a barrel in July 2008 to $80 now. Global commodity prices have started inching up as countries are recovering from the downturn. The drought effect on prices, however, was limited. The rains were deficient but still farmers in Punjab and Haryana almost managed to produce the targeted quantity of paddy. In fact, paddy worth Rs. 4,300 crore is rotting in Punjab as the FCI has not lifted the PAU-201 variety. Dr. Manmohan Singh has candidly admitted that the government has not been able to find a pragmatic way of controlling the sugar prices.
There are mostly domestic reasons for the price rise – the dominant one being mishandling by the Union Agriculture Minister, whose thoughtless remarks have created an unnecessary fear-psychosis of food shortages, much to the advantage of hoarders. He has not only talked up the prices, but also failed to ensure the timely release of sufficient quantities of food grains in the open market even when there are enough stocks. Of course, the partial rollback of the tax relief to the recession-hit industry and the hike in the petrol and diesel prices, which has united the opposition parties and provoked them to boycott the Finance Minister’s Budget speech, has contributed to the price rise.
States too have not taken any significant steps to either check hoarders or speculators or remove glitches in making subsidized food available to the poor. Most states have not lifted subsidized food items, including pulses and food grains, made available by the Center. The laggard states include some of those ruled by the BJP and other opposition parties, which are taking maximum political advantage of the emotive issue of price rise. If they had been honestly concerned about the plight of aam aadmi, they would have cooperated with the government in controlling prices.
Courtesy: The Tribune