Finance minister Pranab Mukherjee’s concerns on inflation, particularly regarding food items, will be shared by much of this country. Ordinary citizens, particularly the millions in the unorganised sector, have been reeling under the high prices they have to pay for items of daily consumption. Moong, a vital source of protein for the poor, is still in the vicinity of `100 per kg, not to mention other pulses and dals. Mr Mukherjee has said overall inflationary pressures have decreased, and that one must now see the rate of growth of the increase. That is fair as prices are bound to rise when supply does not keep up with demand, but it is important to curb the runaway growth in prices. The agriculture minister’s role in this is critical: for unless food production can be increased on a war footing, the situation is not likely to come under control. Unfortunately, though, his role has been found wanting, leaving a lot of unease and frustration in the minds of the people, who feel very little is being done about this matter given the magnitude of the problem.?Mr Sharad Pawar has an agricultural background and he has done much to change the face of Baramati in Maharashtra’s Pune district, and also in the horticultural sector across the state, and it was expected he would have worked tirelessly to bring about a revolution in the nation’s food production. The government knows well in advance when the country’s foodgrain production is going to be plentiful, leading to excess procurement, so it should have created matching storage capacity. In fact, though, this was not done, and thus thousands of tonnes of foodgrain, worth around `50,000 crore, were left to rot in the open, with the government also preferring to let it rot rather than distributing it free of cost to the poor. We live in strange times indeed!
In an interview published in this newspaper on Monday, Mr Mukherjee quite rightly spoke of the need to increase production in view of the proposed National Food Security Bill. One only hopes that he can goad the agriculture ministry into action, otherwise the entire food security matter will be a failure even before the bill becomes law. If the production falls short of the country’s requirements, the government will once again have to go in for food imports, draining our resources and also inviting imported inflation. This in turn would increase the government’s subsidy burden. It would be far easier and much more practical to insist that the agriculture ministry take responsibility for providing the groundwork for the success of the Food Security Bill. As Mr Mukherjee put it, “the very basic foundation of food security is production.” Even good rains would be meaningless unless sowing takes place and there is a plan to increase food production. Since last year we have seen the Planning Commission deputy chairman and others say that food prices would fall when the rabi crop comes in; subsequently this goalpost was shifted to “if the rains are good”, and now till the kharif crop, and so on...
That apart, India’s economy seems in fine form if one does not take into account the disturbed areas in 15 states that are under the control of the Maoists/Naxalites. India is still the flavour of the season for foreign investment as it remains one of fastest-growing large economies, along with China, and investments in Indian stock markets offer good returns. There is an inherent danger of too much overseas funds flooding the markets through foreign institutional investors (FIIs), but as the finance minister noted, the Reserve Bank of India is well equipped to handle any eventuality.