Sir,
India’s massive population under the low and lower-middle income groups is increasingly under distress as the retail inflation soared to a near six-and-a-half year high in October. The wholesale inflation too rose to eight-month high.
Food prices are hardening across the board. Thanks to the Government’s so-called large financial boosters, mostly delinked with production, productivity and consumer reach, India’s rich and well-to-do, who number at least 250 million or nearly 80 percent of the entire present US population, are fund flush and least impacted by the growing retail inflation. In fact, this category of consumers seems to be contributing more to the inflation.
But for an estimated Rs1.5-lakh crore PM Gareeb Kalyan Anna Yojna, distributing free ration to the poor since the beginning to the nation-wide ‘lockdown’ to fight the pandemic, the retail food prices would have soared even at higher levels. The scheme, covering some 800 million people, is scheduled to continue till the end of this month. It is naturally feared that food prices may further move up once the free ration programme ends across the country. The Commerce and Industry Ministry data, released last week, showed inflation as measured by wholesale prices rose an annual 1.5 percent in October, higher than 1.3 percent in September. This spurted the core inflation to an 18-month high. The core inflation shot up to 1.7 percent last month, up from one percent in September.
Unfortunately, both the Government and the RBI are almost silent on inflation control strategies. The new farm laws amended the Essential Commodities Act, 1955, which dealt with the control of the production, supply and distribution of certain commodities. The items such as cereals, pulses, oilseeds, edible oils, onion and potatoes now stand removed from the list of essential commodities. After the Centre enacted a new set of laws freeing internal trade in farm produce, crop arrivals in regulated wholesale markets have witnessed a sharp decline. Arrivals of most crops, from oilseeds, cereals and pulses to fruits and vegetables have fallen sharply. This is a matter of great concern. A bank rate increase by the RBI appears to be overdue. Such a step will bring down the consumer price inflation to some extent. However, the responsibility of ensuring adequate supply of essential household consumables clearly lies with the government.
Nantoo Banerjee
N Delhi
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