The most worrisome problem agitating the minds of millions of common people in India today is how long they must bear with the food price inflation that has hit them hard in the past couple of years. Stung by the sharp rises in the cost of living, large sections of the people in both rural and urban areas clearly feel let down by the state. The relentless upsurge of the prices of food items and some other essentials, and the absence of an adequate response from the central and State governments, has stoked people’s fears about the future.
Unlike employees in the organised sector who have been partly compensated by periodical wage and salary hikes based on the consumer price index, the workers in the unorganised sector have to depend wholly on the state to make good, at least in part, the erosion in their real income. If, in spite of all this, there has been no big upheaval it may perhaps be owing to the implementation of State-level schemes under which rice or wheat is supplied to all eligible families for a highly subsidised price of Rs. 2 to 3 per kg. through the public distribution system.
In Andhra Pradesh, for instance, the prices of essential commodities, above all, food items such as rice, wheat, pulses, milk, eggs and meat, have gone up by 35 per cent in the last year and by nearly 80 per cent over the last two years (as against official figures that register a 17-20 per cent rise). This has reportedly forced the most vulnerable of the poor in some parts of the State to reduce their food intake drastically. Parents withdrew their children from private schools and had them admitted to government-run schools that provide free mid-day meals to their students, according to some studies.
The central government holds that inflation is a worldwide phenomenon and is not confined to India. The opposition parties do not agree; they contend that while commodity prices have shown a downtrend in other countries, in India the prices of all commodities except steel and cement have either gone up or remained static.
The government’s refusal to ban futures trading or speculative trading is seen as a significant factor fuelling inflation. Promoting cash crops to the detriment of food security, encouraging corporate farming, facilitating the provision of bank loans against food grains, and raising the limits for holding food grain reserves from five per cent to 10 per cent are also factors that boosted the inflation. Many State governments are accused of refusing to take firm action against hoarding and black-marketing, despite plenty of evidence that this is happening.
Adding to the agony of the victims of runaway inflation are some steps taken by State governments. These include the large-scale denial of the meagre facilities provided by the PDS in the name of weeding out bogus cards, a refusal to renew cards, and the tardy implementation of the National Rural Employment Guarantee Scheme, which is already facing charges of corruption.
Apart from these immediate causes for the inflation that touched a decade-high 19.95 per cent in the week ending December 5, 2009, there are a few long-term factors that figure in the ongoing inflation debate. The first is the staggering scale of foodgrains lost in the absence of post-harvest storage facilities 63 years after Independence. Another factor is that more than 60 per cent of land under cultivation is rain-fed and is not served by any irrigation system. The third is the inadequate productivity of Indian agriculture. Besides, there is the impact of certain liberalisation policies pursued vigorously by the government for about two decades, which have caused great damage to Indian agriculture and destabilised its economy.
Chief Ministers’ Conference
The country’s worst food price inflation, and the way the governments at the centre and in the States have been tackling it, came up for discussion at a conference of Chief Ministers convened belatedly by Union Minister of Agriculture and Food Sharad Pawar in New Delhi. Inaugurating the February 6 conference, Prime Minister Manmohan Singh registered concern over “the distress that the sharp rise in food prices has caused to the common man” but held out the assurance that “the worst is over in food inflation.” He conceded that “while we did well to protect incomes of the poor, we have been less successful on the food prices front.”
Dr Singh the economist explained that with good crop prospects, remunerative prices being in place, and Indian prices being broadly in line with international prices, the government would soon be able to stabilise food prices. He noted that high prices caused by a shortfall in output could be handled only by augmenting supply either through a drawdown of available stocks or through imports. The government, he added, was freely allowing imports of those food articles whose prices had been under pressure, and there were adequate stocks of rice and wheat in the central pool to maintain food security. Calling attention to the wide difference between retail and farm gate prices, the Prime Minister brought up the issue of opening up retail trade, arguing that “we need greater competition.”
The issues of food price inflation, the increases in the cost of living, and their adverse impact on mass deprivation and poverty across the land have certainly been reported in some detail in newspapers and on news television. But barring some exceptions, there has been a shortage of independent critical analysis and informed comment. This is the time for news organisations to make the best use of their internal specialised resources where they exist. Even more important, they must draw on the expertise available within the professional community of economists, other experts, and policy specialists. The challenge for the news media is to analyse the essential facts relating to food price inflation and the increased cost of living burden, the situation evolving on the ground, the specific impact on millions of India’s most vulnerable people, and the claims of the various governments. It is to truthfully, insightfully, and interestingly bring home to readers, viewers, and listeners how people, individuals and groups, belonging to different socio-economic strata are affected. It is to help people see through the blame game being placed, which tends to obfuscate the issues. In my opinion, The Hindu has done quite well on these issues; apart from news reports, it has published four editorials in four months and five well-written articles in eight months. However, considering the gravity and magnitude of the problem, the need for deeper, more interesting, and more impactful coverage stands out.