Tuesday, August 21, 2012

Inflation in benefit of farmers, really!

Saswat Panigrahi

Beni Prasad Verma has now stoked a new row. At a time when rising inflation has left the common man bruised, the Union Minister for Steel came up with a theory which literally stunned the nation. He said that he was "happy" with the soaring prices of food items because according to him, inflation was beneficial to the farmers.

Verma went on to blame the media which was reporting the rise in prices of essential commodities as it was. "Media kehti hai ki khane ki thali mehngi ho gayi hai.. .Isse fayada kisano ka hai, aur sarkar kisano ke fayda ki pakshdhar hai" (Media says cost of food plate has increased but it is benefitting farmers...But, this is helping the farmers. And the government is in favour of farmers’ profit).

Beni Prasad is a senior minister in the Union cabinet and so what he says will be read as the voice of the UPA government.

Remember, another senior Union Minister P Chidambaram recently mocked at the middle class, saying “It cribs too much about price rise”. “The middle class is ready to pay for mineral water and ice cream, but can't bear an increase of Re 1 in price of wheat and rice”, Chidambaram had said.

Excuses, excuses and more excuses – for the ever increasing price rise!

It is no secret that the common

man has been suffering enormously on account of the reckless policy of UPA government. Experts have time and again blamed the government for many of the economic woes that the country has been facing today.

Annual inflation in food articles was pegged at 10.06 percent in July 2010. The figure has been burning holes in common man’s pocket. But the government seems be in a state of inertia and is said to be least bothered, even though the new Finance Minister P Chidambaram has promised to get the economy back on track.

On several occasions, the UPA government has tried to come out with the theory of “imported inflation” and blamed the rise of prices on global phenomenon.

Two global rating agencies - Moody's and Standard and Poor's (S&P) – had severely indicted the Congress-led UPA for pushing India to an economic brink.

Moody's Analytics had said that India was growing but below its potential and blamed UPA government’s politics for weighing on the economy.

As if that was not enough, another report by S&P blamed the UPA leadership for the current economic impasse.

But the government continues to live in denial.

Well… A government which has abysmally failed to rein in the rise in food prices has now come up with a flawed theory to defend its inability. If this is not being insensitive than what is?

It is ironical that the government has suddenly awakened from deep slumber to sympathise with the farmers and in a bid to project itself as a champion of farmers’ cause, a senior minister comes up with - “Price rise is in the interest of the farmers.”

UPA’s new theory to defend inflation is filled with flaws to say the least. One can explain how -

Farmers solely depend on agricultural produce to earn their livelihood. But they never get the supportive price for the products. They mostly sell their agricultural produce to the middle men (traders as they are known as).

When the price of food item increases, it doesn’t swell the farmers’ coffers. It mostly benefits traders or middlemen.

It is unfortunate that the nation is being headed by an economist Prime Minister, whose minister fails to understand this simple logic of economics.

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