Prices hit sky high, response rock bottom-29/7/10

29/07/2010

Prices hit sky high, response rock bottom

New Delhi: Skyrocketing food prices disrupted proceedings in Parliament for the third successive day on Thursday, forcing two adjournments of both Houses, the second one for the day.



Lalu Prasad, Sitaram Yechury and other Left and Third Front MPs during a protest against price rise at Parliament House, in New Delhi on Thursday. PTI Photo

Agitated members later took to the streets deciding to knock at the doors of President Prathiba Patil. Traffic went haywire as MPs marched to the Rashtrapathi Bhavan.

Earlier, vociferous protests by the opposition erupted as the two Houses assembled at 11 a.m. Failing to restore order, Lok Sabha Speaker Meira Kumar and Rajya Sabha Chairman Hamid Ansari adjourned the proceedings till 12 noon. However, with the pandemonium continuing when they reassembled, both Houses were adjourned for the day after government papers were tabled.



BJP President Nitin Gadkari, senior leaders L K Advani, Sushma Swaraj, Murli Manohar Joshi and other party leaders come out after submitting to President Pratibha Patil a memorandum on the issue of price rise on behalf of crores of common people, in New Delhi on Thursday. PTI Photo

In the Lok Sabha, angry opposition members led by Sushma Swaraj of the Bharatiya Janata Party and Mulayam Singh of the Samajwadi Party were on their feet as the House assembled at 11 a.m., demanding a discussion on the price rise issue as an adjournment motion that entails voting.
Sushma Swaraj reminded Speaker Meira Kumar of the assurance given by her Wednesday that she would consider discussion under any other rule, except an adjournment motion, on the issues of price rise and fuel price hike.



BJP President Nitin Gadkari, with senior leaders L K Advani, Sushma Swaraj, Arun Jaitley and others, talking to the media after submitting to President Pratibha Patil a memorandum on the issue of price rise on behalf of crores of common people, in New Delhi on Thursday. PTI Photo

The Speaker had rejected the opposition's demand for a discussion under an adjournment motion Wednesday. However, Parliamentary Affairs Minister Pawan Kumar Bansal objected to the opposition's demand for a discussion under an adjournment motion and stated that the government was ready for a discussion under rule 193, which does not entail voting.



Here is why the government has been issuing only promises, but not controlling prices:

1. While prices have been skyrocketing, food grains in various government-run godowns are rotting or are being consumed by rodents. When a hungry woman tried to take grains that was left in the open in one of the godowns in Bihar, she was thrashed by officials. When rats eat the same grain, the officials vanish.

2. As on January 1 this year, 10,688 lakh tonnes of food grains were found damaged in FCI depots. This would have been enough to feed over six lakh people for over 10 years.
Between 1997 and 2007, 1.83 lakh tonnes of wheat, 6.33 lakh tonnes of rice, 2.20 lakh tonnes of paddy and 111 lakh tonnes of maize were damaged in different FCI godowns.
"The FCI godowns have enough space to store food grains properly. Yet the grains are rotting in open spaces on their premises while millions are starving. It's a national shame," said Dev Ashish Bhattacharya, who filed the RTI application on this issue January 6, 2010.

3. The inflation as calculated on wholesale prices was a mere 1.5%, although consumer prices were rising at a blazing 13.5% year on year.



4. In November 2009, Montek Singh Ahluwalia, deputy chairman of the Planning Commission and the point man for economic policy, predicted that rising prices would be controlled by the end of the financial year, that is, March 2010.

5. By January 2010, inflation rate based on the consumer price index touched a 42-month high of 16% and then settled at 15% in February.

6. In February 2010, the Prime Minister said that the worst was over. However, wholesale prices increased by a whopping 10% in the same month, entering double-digit territory for the first time.

7. Around the time of annual Budget, Finance Minister Pranab Mukherjee said prices would moderate in two months. Agriculture Minister Sharad Pawar added his bit by saying that food prices had started falling.

8. The Prime Minister set up a core group of ministers and chief ministers from 10 states to come up with a strategy for bringing prices down.






9. Contradicting Ahluwalia's prediction of controlled prices, March 2010, witnessed the sarkari inflation rate jumping to 11% while consumer prices were rocketing to nearly 15%.

10. The core group set up three working groups to look into various aspects of price rise, like how to increase production of food, how to tackle storage and distribution problems and so on.

11. On April 27, 2010, the Opposition sponsored a countrywide bandh protesting against price rise. But the government did not react.

12. Since May 2010, the Prime Minister has been stoically maintaining that inflation will go down by the year end, while the Finance Minister kept saying it will get under control after the monsoon. Nothing of this happened.

13. Economic bureaucrats are also busy churning out deadlines for inflation. Chief statistician TCA Anant predicts November, the PM's economic advisory council goes with November too while chief economic adviser Kaushik Basu says August.

14. Reserve Bank of India continues to stick to its theory that inflation can be controlled by regulating the supply of money in the economy. RBI has upped the central banks' lending and borrowing rates four times in the space of five months, including twice in July itself.






15. However, there has been no check on the raging price rise. The WPI-based inflation rate is 11% in July, the sixth month running in double digits while the CPI-based rate has been in double-digit territory for 11 months till May 2010, which is the last month for which data has been released.

Will there be some relief for ruined family budgets in the coming days? By the government's reckoning, it can happen anytime in the next six months, as it could have in the past six.

Source: India Syndicate and IANS

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