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Manomhan’s Measure to Tame Food Inflation – Unacceptable

January 14, 2011

The Indian Government headed by the Weakest Prime Minister in the History, Dr Manmohan Singh shed Crocodile Tears on Rising Onion and Vegetable Prices by announcing slew of measures which will not have any long term impact on the Food Inflation.

The Government said that Onions, including imports from Pakistan, will be sold through agricultural co-operative outlets at nearly landed costs, cheaper than prevailing market prices. Export and import policies for essential commodities will be reviewed regularly, with further bans on exports imposed or restrictions on imports lifted as needed safeguard supply to domestic markets.

State-run enterprises are to intensify purchases of essential commodities (edible oil and pulses) for distribution through their network and through the public distribution system (PDS). This is an attempt to control retail prices and increase supply in the PDS (outlets that distribute rationed commodities at subsidized prices).

However, the real problems with respect to Food in India are – structural supply-demand imbalance, Low productivity in the agricultural sector [Fertile Land Acquisition at the behest of Mega Industrialists] as well as wastage of food due to transport and storage deficiencies is holding down end-supply and shift in consumption patterns towards high-protein foods.

To address these more issues you need structural reforms to raise productivity in the sector and strengthen supply chains, including more cold storage facilities. That will take time, we agree, but we strongly condemn in-action from the Government and not even a single move in the right direction. Oho! Well, they are busy managing Money in IPL, CWG, Spectrum, Railways and other scams 😉

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