Inflation red flag

Consumer price inflation, specially in food, was expected to rise due to the deficit monsoon. It rose 6.1 per cent for November from 2.8 per cent in July. The fact that arhar (tur) is up 78.5 per cent, urad 76.5 per cent and gram 62.5 per cent points more to traders profiteering than monsoon woes. The farmers say they sold tur at Rs 5,000-6,500 per quintal, then traders resold it at Rs 13,000-14,000. People are now paying nearly Rs 200 per kg. If this is true, the government must explain what it is doing to check such profiteering. Even today, traders are buying tur, a kharif crop expected to enter the market in February, at a beaten-down price of Rs 8,000 a quintal, but consumers still have to pay close to Rs 200 per kg. Why is this so?

The government must re-examine its entire farm policy. When President Pranab Mukherjee was finance minister, the Budget had allocated Rs 300 crore to grow pulses in 60,000 villages. This created a surplus and farmers had to sell pulses at below minimum support price. Significantly, inflation in transport and communications is up as the government hiked excise duty for petrol and diesel despite global crude prices falling. The government understandably wants to shore up its finances, but why at the cost of the aam aadmi? ONGC too is urging the government to reduce its cess of Rs 4,500 per tonne, that was fixed when crude prices were '100 per barrel. Today, however, it’s just Rs 45 per barrel.

 

 

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