The inflation has started hurting the Indians badly. The inflation figures based on Wholesale Price Index for various categories is given below. All the % are on an annual basis,
Food articles: 7.02% (in 2007) to 17.41% in January 2010.
Food products: 3.43% (in 2007) to 22.55% in January 2010.
Food commodities: 5.60% (in 2007) to 19.42% in January 2010.
Foodgrains: 6.27% (in 2007) to 17.89% in January 2010.
Cereals: 6.27% (in 2007) to 13.69% in January 2010.
Pulses: 2.14% (in 2007) to 45.62% in 2007 in January 2010.
Rice: 6.05% (in 2007) to 12.02% in January 2010.
Wheat: 6.77% (in 2007) to 14.86% in January 2010.
Dairy products: 6.08% (in 2007) to 12.87% in January 2010.
Eggs, fish and meat: 6.38% (in 2007) to 30.71% in January 2010.
Sugar: (-)14.69% (in 2007) to 58.94% in January 2010.
Food products: 3.43% (in 2007) to 22.55% in January 2010.
Food commodities: 5.60% (in 2007) to 19.42% in January 2010.
Foodgrains: 6.27% (in 2007) to 17.89% in January 2010.
Cereals: 6.27% (in 2007) to 13.69% in January 2010.
Pulses: 2.14% (in 2007) to 45.62% in 2007 in January 2010.
Rice: 6.05% (in 2007) to 12.02% in January 2010.
Wheat: 6.77% (in 2007) to 14.86% in January 2010.
Dairy products: 6.08% (in 2007) to 12.87% in January 2010.
Eggs, fish and meat: 6.38% (in 2007) to 30.71% in January 2010.
Sugar: (-)14.69% (in 2007) to 58.94% in January 2010.
The Government has argued that poor monsoon in 2009 is the reason for the spike in food items. But a casual look at the figures refutes the Governments claim. Prices have been rising steadily since 2007. And this cannot be due to too much liquidity in the market. In fact the high interest rates prevalent has sucked the liquidity out of the system. And this is also not due to a sudden increase in the demand. Everything points out to a major supply side problem. Poor monsoon in 2009 is definitely a cause, but not THE cause. Allowing organized retail has led to these players hoarding so as to sell at a higher price. It almost looks like the Government is hand in glove with the organized retailers. Added to this, the Public Distribution System which has been a solace for the low income people over the decades have been systemmatically undermined since the reforms in 1991. The PDS is not functioning efficiently in states like Kerala that has perhaps the best PDS network. Other States are miserable in this aspect.
And to think that this has happened during the extended tenure of an 'eminent' economist Dr.Manmohan Singh is a crying shame. If his economic policies do not ensure the common man able to meet his basic needs, then it has to be a failure.
Less said about the Agricultural Minister, Sharad Pawar, the better. The Sugar inflation is 58% and we recently had an expose that Sugar was being exported despite a ban. It is clear where his loyalties lie.
Reforms have been stalled, economy mismanaged, monetary policies dont facilitate growth, fiscal deficit is spiralling, delivery mechanisms in shambles, vaccum in leadership and no one is accountable - what a crying shame?
In any other country, the opposition would have been out on the street, mobilizing people and fighting against this shameful situation. But with elections fought through TV and most parties headed by nincompoops who are where they are due to their lineage than their grassroot political credentials, what else can you expect. Sitting in ivory towers is alright but it should not lead to a situation where there are food riots, a situation that is not too far away. The consequences of such riots will be terrible.
