Tamil Diplomat

Is the Modi govt out of touch with the pulse of the nation?

Samakalam
January 18

There used to be this recurring theme during the summer of 2014 – “Bahut hui mahangayi ki maar, ab ki baar Modi sarkar” or that there has been enough of inflation, now is the need for Modi government.I wonder what the Finance Ministry thinks about it, now that the consumer inflation (CPI) stands at 5.61 per cent for December 2015, rising for the fifth straight month and at the highest in 15 months. The inflation for rural consumers and in pulses stood at much higher 6.32 per cent and 46 per cent respectively. At the same time, the midyear assessment of the Finance Ministry predicts inflation to cross 6 per cent + level in early 2016 while the GDP growth forecast has been downgraded to 7-7.5 per cent as against 8.1-8.5 per cent as predicted in the economic survey by the same ministry earlier this year.

Doesn’t the government find it tragic that the farmers staying in rural areas, already in the gloom of two failed droughts which have damaged four consecutive harvests, have to bear the maximum brunt of growing inflation in this country? 5.61 per cent inflation may seem a moderate rise in isolation but any economist will tell you it’s a worrying statistic when the world prices are rising at just 0-0.5 per cent rate and when the India’s crude oil basket is at 12 year low of $28.73.First, coming to the issue of pulses. Any administration is well aware that the pulses are the only major sources of protein the low income households. Each 100 grams contains 32 grams of proteins and several amino acids not made in the body, making it quintessential part of Indian meals. However a 50 per cent inflation rate makes it far beyond the reach of most Indians who on an average, are already shelling out 5 per cent of their household incomes just to buy pulses today!

Given this hyperinflation, one would assume that these high prices would become natural incentives for farmers to grow pulses thus helping increase supply and cool off prices at some point. But if you ask any farmer, he would tell you that growing pulses is an extremely risky choice. Complete failure of government in managing supply, delayed announcements of MSPs, and mafia that doesn’t let farmers get the best prices for their harvest are just some of the factors that lead to a complete breakdown of the pulses’ supply chain leading to such price shocks. The absolute neglect of the government can be judged from the fact that despite knowing all of this, only one in six farmers who grow pulses today get the benefits of the irrigation channels. This means that pulses which take about a fifth of all agriculture land contribute to just a tenth of all agriculture produce.(indian express 2016)