Sunday, December 1, 2013

Has India become richer?

The feature “50 year ago” of The Hindu on 22nd November 2013 contained the following report:

 "Almost all the grocery shops in the city remained closed following raids on rice, shall (?) and oil shops during the last three days by people in certain localities in the name of consumer resistance to high prices. As essential commodities in Calcutta and suburbs registered over a 30% increase in the past 15 days consumers started offering resistance in an organised manner. But this was soon followed by violent acts due to the fact, as some traders put it, anti social elements took command of the situation."

Rise of only 30 % in prices had then induced an agitation verging on public violence. Today, the retail inflation is reining far too high at or above 10% and the prices of essentials including all edibles, from grains to oils, to meats and vegetables, are reported to have risen within the last few months by as much as 285%. Surprisingly, there is no stir against the steep rise in prices. Even the working classes, which are always more vocal in protesting against the runaway prices, have kept quiet. Those who have seen such resistances earlier in the 1950s and 1960s would surely find this quietude and equanimity displayed in this volatile matter by large sections of affected people, including the under-classes, is somewhat strange.

Politicians had been predicting since the rainy season that the prices of vegetables would fall post-rains. The monsoons withdrew in September and at the end of November prices of vegetables continue to rule high. Even the lowly potato that was selling only a few days ago at Rs. 15/- a Kg has climbed on to Rs. 40/- and is likely to climb further. With prices of onions and potatoes, the two staples, going through the roof life ought to have become difficult for the economically weaker sections. But there is no whiff of any resistance. Everybody seems to be taking the whole thing in stride.

There seem to be two possibilities for the absence of any stir in this regard. Either the general population has come to the conclusion that there wouldn’t be any point in kicking up a row about the unconscionable rise in the cost of living as, at least for the present, there is just no government in the country, the politicians being all busy electioneering. Or, as Manmohan Singh’s government claims, with its social sector spending the under-classes have now substantial incomes that have boosted demands all around in rural and urban areas pushing up all the prices. They would, therefore, hardly hany reason to complain. Which of the two factors is working is difficult to fathom. It could be one of them or both. But one finds it rather strange that despite an unacceptable level of retail inflation there is an unseemly and an uncharacteristic quietude all over the country, as if all is well with it. Have our countrymen become richer? 

The Centre does not seem to be bothered either. That this unsustainable high level of inflation has a deleterious effect on the country’s economy impacting its fiscal position and weakening its currency does not seem to attract their attention. No measure to counter the runaway inflation has been taken or announced and the government seems to be playing for time till the elections next year. In the meantime, regardless of the pervasive tranquility, the hoarders and middlemen in the wholesale markets of grains and vegetables are making merry – suckering up the farmers and cheating the consumers. It would be silly politicians to touch them as some of them, if not most, could well be the financiers of prospective contestants at the hustings.

Looks like, people are going to be stuck with the high prices of various commodities for quite some time in the future. They are unlikely to come down even after the elections as no politician, much less the food minister, seems to be keen on taming them.

Photo: From the Internet

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