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Price rise

Last updated on: July 30, 2010 13:33 IST

Image: A girl walks in front of the portraits of Congress president Sonia Gandhi, Rahul Gandhi, and Prime Minister Manmohan Singh.
Photographs: Sivaram V/Reuters Surjit S Bhalla

The Food and Agriculture Minister, Sharad Pawar, gets appointed to be head of the International Cricket Council.

He boastfully announces that the UPA coalition has given him too much work and, therefore, it should give him more junior ministers to do his daily hard work.

Meanwhile, food prices have erupted all over the country, now for more than 15 months or so. It has been raining double-digit inflation in food, and for some articles, the inflation is above 15 to 20 per cent each year for three successive years.

In the first year, the government said that it was helpless because world prices of wheat, rice and peanuts had all exploded because of the nasty shenanigans on Wall Street. True.

There was a world crisis and oil had shot up to $147 a barrel. We couldn't and the people didn't blame the government.

. . .

Price rise: Why an arrogant Congress can get away

Photographs: Reuters

The next year, 2009-10, international food prices collapsed as the world spiralled into a recession. The speculative froth was off, and food prices began to reflect fundamentals as international prices of the most-traded agricultural commodities -- wheat, sugar and rice -- halved.

In India, food prices continued to shoot up. What did the UPA government do? It pointed to the bad monsoon for being responsible for food prices rising and rising.

Yes, of course, but couldn't we release the massive amount of foodgrains that the government keeps in stock for precisely such an occasion? This would bring down food prices and especially help the aam aadmi.

Not some ordinary person but the God that all Congressmen (and women) are required to worship every morning. After all, we have to pray to those who brought us to power.

The massive amount of stock foodgrains could not be released because of administrative problems, inefficiencies in government administration, and the fact that some of the government food was rotting and not even fit enough for rats to eat.

. . .

Price rise: Why an arrogant Congress can get away

Photographs: Reuters

But haven't we been running the Public Distribution System (PDS) for the last 40 years? What happened to the much-vaunted IAS bureaucracy, and Nehruvian planning? We have a drought and we cannot release food in the godowns to the poor?

We cannot and there is nothing the aam aurat can do about it. So, go fly a kite and anyway, what can you do -- elect the BJP? (More on that below.)

So, can we import some foodgrains please, especially since international food prices are so favourable? No we cannot? Why? The UPA skipped these questions and it was easy to do so because nobody in the government is required to have a press conference, least of all the real boss, Sonia Gandhi.

One possible explanation is that our Food Minister Mr Pawar was busy trying to get himself elected to be head of the International Cricket Council. But that is a non-sequitur because nobody really believes, or should believe, that a minister is required to be a clerk and place orders to import food, or be the captain of the ship to bring the food to our shoes, or be the driver of the truck to bring the food to the shops, or be the shopkeeper who sells you the food in ration shops.

What we have here is massive incompetence. But let us not be too harsh on the UPA government. While it could have been importing and releasing food, and it could have been making the foodgrain stock release system responsive, it has been working on something far bigger, and far more important for not only the poor of India but the poor of the world.

. . .

Price rise: Why an arrogant Congress can get away

Photographs: Reuters

It has been working on a shining path for the future, a path that was lit up by other believers in aam aadmi like Stalin and Mao and Castro. It has been working on a food security Act, an Act that would bestow the right to have food on every person, as long as food is available in government food shops.

But this is not the only grand design of the beloved and much-loving Congress party. The next Act is the Happiness Act for the aam aadmi, also known by its acronym Haaa. This Act will be passed on International Happiness Day and the whole world will be watching.

But there are aspects of the government, the non-political aspects, that are working in a positive direction. The UPA was brave enough to accept that it committed a grievous error when it reversed its own mistaken policy of administering oil subsidies. From now on, oil prices will go up as well as down. (Or so we hope.)

A new tax system will be in place within a year, a system that should considerably improve government finances and India's economy. One should give credit where it is due -- but not the losing, losing, lost BJP.

The saffron party's response to food prices going up and fuel price reform? It calls for a bandh and disrupts work around the country. It protests the freeing up of fuel prices, thus going against the very policies the party itself had followed.

. . .

Price rise: Why an arrogant Congress can get away

Image: BJP stalwarts Nitin Gadkari, L K Advani and Rajnath Singh leading a rally against price rise.
Photographs: Reuters

As a means of bringing food prices down, it wants to bring back the essential commodities Act, something the party had rightfully dismantled when it was young. To continue leading itself down its chosen garden path to destruction and rank stupidity, the party now wants to stop all talks with Pakistan.

Again, the BJP under Atal Bihari Vajpayee's prime ministership had persisted with peace talks through all shocks and surprises. And instead of being forward-looking and unifying, the party wants to continue with the divisive politics of its junior, rabble-rousing members.

So, the next time you wonder about how the Congress party can get away with arrogance and gross incompetence and feudal politics, and hurt the very poor policies, and still retain popularity and even have visions of being at the Centre for generations to come under the leadership of one family -- stop wondering. Just look at the BJP.

The author is the chairman of Oxus Investments, an emerging market advisory and fund management firm.

Source: source