Price Rise And Inflation

Precarious Situation
• The economy is moving towards a dangerous situation. The price index and inflation rate are shooting up and the share market has shown a great decline. All this is the result of wrong decisions and advice by bureaucrats. It is surprising that to reduce the price index, the government is importing essential goods without sparing a thought for the Indian farmers. A day will come when the nation will have to bow before other nations for food. Food and shelter cannot be substituted by industrialisation and share markets. K. Ravi, Vaikom
• Food shortage was anticipated long ago. Agriculture scientists demanded and increase in production through improvised and innovative methods and offered suggestions for the same. The government did not pay farmers reasonably but resorted to imports at a higher cost. This has resulted in the depletion of foreign exchange. The goal should have been to achieve self sufficiency in food production. A. Ramanathan, Chennai
• The UPA government is not just going to leave the voter angry in 2009 - It is going to leave behind chronic inflation. Although inflation affects all the classes, the poor are the worst hit. Not only will their incomes fall but their sources of income will disappear. India's robust growth rate has been able to cushion the adverse effects of inflation to a limited extent. Despite projections of exponential growth in yields of oil seeds and pulses, there has been no action to marry the laboratory to the farm and actualise theses. J.S. Acharya, Hyderabad (Letters to the Editor Coloumn, The Hindu, April 1, 2008)
Rising Inflation, Growing Unrest
The production of cereals, especially wheat, pulses and oil seeds, has been going down over the last several years. This is the real cause of discontent among the masses.
• The current crisis is a clash between declining supplies of goods and their increasing demand by the people. This paradox of reducing supplies and rising demand is accentuated by the recently introduced commodity exchanges whose thrust is forward trading. If it chooses, the Government can intervene through the exchanges by selling commodities forwards and delivering them through imports.
• Alternatively, import the items and flood the markets with their supplies. Oversupply is the key to deflating prices. Apart from the consumption, getting as much as he requires, over supply also demoralises the speculative trader or the hoarder. In the medium term, the answer must lie in inducing greater production. Prafull Goradia, Pioneer, 3.4.2006