BHARAT BANDH!!

Date – 05th July, 2010. Place – India. Reason – Inflation. All opposition parties involved.

While I was writing this post, India was observing a voluntary off from their daily routine. School, Colleges, Private Offices across the country were shut. People also had taken a break to support a Bandh called against rising costs of primary articles.

If one observes the price of any primary food article, one would have to say there should be this kind of Bandh everyday. Since 2004, prices of articles like rice, pulses, milk, sugar and edible oil increased in the range of 150 to 200%. Adding to the woes of common man, Government recently decontrolled the auto fuel prices to curtail the fiscal deficit. The decision was bold. It was perfect if looked with an eye of economist. But timing of the same is in question. With food price inflation already ruling in double digits, decontrol at such time was certainly unwarranted.

Economic growth taken place since 2004, globally, was stupendous. World has witnessed highest ever growth rates from 2004 – 08. It has resulted in raising the income levels across the globe. Each & every commodity traded on bourses was witnessing a tremendous increase in trading volumes both due to speculation & supply constraint. In India, middle class population has been increasing with fast pace as sectors like Auto, Pharmaceuticals, Banking & Financial Services, IT are doing fantastically well. Farmers have got never seen Minimum Support Prices (MSP) for wheat, rice, cotton in last few years. It has helped them to get some cash in their hand. National Rural Employment Guaranty Act (NREGA) has also helped rural people to get cash in the off-agro season. This all has resulted in placing more money in the hands of people. Though wheat, rice & other agro products in India have witnessed record level of production; it is not enough for meeting needs of the people. With agriculture growth rates not surprising us on the positive side, prices are bound to move up. Traders which have become oligopolistic in nature are making it worst.

Government has its task cut out. First of all, they should invade all warehouses & streamline the supply. Book the traders which are holding the grains in warehouses. This would tackle the sporadic price rise in primary articles. This would certainly make sure the price correction in the short term. Secondly, Government should seriously start reforming agriculture sector. They should indulge in finding ways which would raise the farm productivity in India in a sustainable way. This would make sure food sovereignty of our nation. These are obviously not easy tasks to do. But Government should start taking steps in these directions. Their attitude towards the issue of inflation right now is too adamant to accept. If government is not position to do anything, they should come up with the white paper on this. These price levels are hurting common man & their silent support for nationwide strike shows it clearly.

Opposition parties have done a stupendous task of taking up this issue. Yes, they are politicizing the things but which party would not have? It was heartening to see opposition parties coming together & showing their strength. Some agencies are coming out with estimates of amount of national loss happened due to this. Estimates are in the range 13000 Crore Rs. Huge amount!!! But it was necessary to wake up New ICC chief & his bosses. Yes - reduce fiscal deficit, but not at the cost of lives of people. Find new ways to solve the issues. Don’t just sit & say inflation is a global phenomenon & normal monsoon will pacify the things. Act or face the consequences.

Prasanna Vaidya

Prasanna.vaidya@gmail.com