GP Baroowa
Food prices have gone up abnormally causing severe hardships for the common people.
India's annual food inflation based on the wholesale price index stood at 18.22 per cent for the week ended December 26, as potatoes were dearer by a whopping 110 per cent, pulses by 42.21 per cent and onions by 40.07 per cent over a 52-week period.
Montek Singh Ahluwalia, Deputy Chairman of the Planning Commission, said that food inflation is not rising due to "excessive" money in the economy and monetary policy action may not be a solution. The government may instead increase the supply of essential food items to tame prices, he said.
Reserve Bank Governor D Subbarao is scheduled to announce the next monetary policy decision on January 29. He took the first step toward raising borrowing costs in October when he ordered lenders to put a higher proportion of deposits in government bonds.
Why food prices have gone up so suddenly? Was it only due to drought condition and lower rainfall alone? The government has been saying that poor monsoon is responsible for rising food prices. The Centre could not take timely steps in abolishing import duties on food products resulting in increasing food prices.
India's food-price inflation cannot be tackled through monetary and other policy steps, while inflationary expectations will not stay long, the country's top policy advisors and government officials said on Monday. "It is food inflation which is a substantial part of inflation right now. So there is not much that can be done by other policies, including monetary policy," Finance Secretary Ashok Chawla said.
He is right but we have a suggestion that to bring down the cost of vegetables, eggs and fish the State governments can withdraw inter state movement taxes, if any. Beside the State Governments can directly negotiate prices of fish and eggs through retail venders. If Assam Government directly deals with Andhra Government and with the main suppliers, the cost of fish and eggs would come down immediately. The Bengal Government has taken similar steps and the prices of potatoes have come down to Rs 9 a kg and it may go down further.
The Public distribution system (PDS) of our country needs to be revamped for smooth supply of food products. The private sector should be allowed to import food grain and stock commodities for four months. It is now apparent that a famine like situation may develop and devastate our country. Assam would not be an exception to this scene. Assam never experienced famine in the past. Assam witnesses negative growth rate in the agriculture sector. It might trigger famine like situation unless government takes urgent steps. Assam Government has taken some steps but these are not adequate to cope with the situation. All the States have to augment supply of food products. The State Governments can abolish all the inter-state taxes and rates, if any, on the movement of food commodities. Food commodities while traveling from Punjab and Haryana get costlier by 15% to 18% by the time it reach mandis of Delhi situated only few miles away. The eggs and fish get costlier while traveling from Andhra and Uttar Pradesh to Assam.
This is the time Government of India should consider declaring internal emergency on the basis of food shortages. Centre should direct all the State Governments to abolish taxes on agricultural commodities at least for six months. Perhaps Central Government will not be able to handle the situation alone as the agriculture is the state subject.
Assam Government must protect farm land. The large entrepreneurs must be encouraged to cultivate in collaboration with local land lords. Agricultural sector of India is mainly covered by small and marginal farmers, so our Government should promote small scale agriculture. To overcome the problem, we must promote agriculture in the State. The Chief Minister Tarun Gogoi on Saturday said that special instructions have been issued to the departments to monitor the situation and to act tough on black -marketeers and hoarders.
Another important fact is that the PDS system should be geared up by removing the hurdles so that the people living bellow the poverty line are not affected.
Readers can send their feedback to gpbarua@yahoo.co.in
ASSAM TRIBUNE
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