The disturbing truth about rising food prices
There is a complete disconnect between soaring prices and the government's response. the most common refrain of governments past and present has been to attribute the incidence of extremely steep price situation, particularly of those commodities regarded as essential, to the global pattern. however, a cursory look at the global food price situation would reveal that india compares very adversely as compared to most other countries. the primary reason is that the world today is in the grip of a much deeper recession than us.
however, two other factors adversely affecting the food price situation show that the government is directly responsible for the present state of affairs. its refusal to revamp the public distribution system — and going in the reverse direction to completely dismantle that — is leading to an unprecedented level of exclusion of poor people from accessing food at affordable prices. this is done by trying to artificially manipulate the number of poor and continue with the targeted system, which is absolutely falsifying the prevailing reality. on the other hand, allowing the free play of big private players in the countryside also allows only the relatively bigger players to hold on to their produce and not indulge in distress sale. this is pushing the smaller and marginal peasantry into a state of complete helplessness apart from excluding a large section of poor from affordable food.
the other question is the impact of the increase in fuel price. in the last 12 months, there have been 11 fuel price hikes. the government tried to explain this as a consequence of increase in international crude oil prices. that this is a sham is now increasingly clear because the latest hike has nothing to do with international prices. in fact, international prices are actually lower now. a major component of the increased price is being actually collected by the government as taxes. at a point in time when taxes on corporates are waived and direct taxes are reduced, why should the government increase indirect taxes including those on petro products to raise its revenue?