Our most revered Finance Minister has been shooting off his mouth again. On 15 November, at Bancon 2013, which is a banking conference in Mumbai, he said," Monetary policy has no impact on food prices.
The only way we can contain food inflation is to augment supplies, but supplies are not entirely elastic." What is that supposed to mean? If a bumper kharif crop after the best monsoon for over 20 years is not enough to increase supplies what will? Obviously he is never going to admit the truth which is that the government is entirely responsible for the rise in prices of food. The Minimum Support Price paid to farmers for grains sets a high base price irrespective of supplies and MNREGA has caused rural wage inflation which feeds into prices of produce. High grain prices increase the cost of feeding animals which means the prices of milk, eggs and chicken keep rising. To win in 2009 the Congress forgave all loans to farmers. Faced with high NPAs in state controlled banks it cannot repeat the same bribe this time so maybe this is another way of providing a bonus to farmers. Our Agriculture Minister, who is a friend of the Congress, has said that rising prices are good for farmers. " Supplies won't increase dramatically in a short period of time. For supplies to rise we need great investment, great production, better distribution and better logistics. So, we have a challenge," the FM said. Which begs the question: What the hell were you and your cronies in government doing for the last 10 years? The government has stockpiled over 75 million tonnes of grains when the mandate is for 28 million tonnes. Thus the government is guilty of hoarding grains, causing prices to rise. This is a criminal offence. Why was salt selling at Rs 150 per kg in the eastern states just a couple of days ago? The lies do not end there. Heads of Central Public Sector Enterprises were summoned to the Finance Ministry den at North Block in Delhi and ordered to pay higher dividends so that the fiscal deficit does not shoot up. Oil companies ONGC and Indian oil and the gas provider GAIL were there as they are sitting on large cash piles. We were told that these companies were making huge losses because of subsidies so fuel prices were raised, feeding into electricity bills and airlines losses. Lies cannot fool us all the time.
The only way we can contain food inflation is to augment supplies, but supplies are not entirely elastic." What is that supposed to mean? If a bumper kharif crop after the best monsoon for over 20 years is not enough to increase supplies what will? Obviously he is never going to admit the truth which is that the government is entirely responsible for the rise in prices of food. The Minimum Support Price paid to farmers for grains sets a high base price irrespective of supplies and MNREGA has caused rural wage inflation which feeds into prices of produce. High grain prices increase the cost of feeding animals which means the prices of milk, eggs and chicken keep rising. To win in 2009 the Congress forgave all loans to farmers. Faced with high NPAs in state controlled banks it cannot repeat the same bribe this time so maybe this is another way of providing a bonus to farmers. Our Agriculture Minister, who is a friend of the Congress, has said that rising prices are good for farmers. " Supplies won't increase dramatically in a short period of time. For supplies to rise we need great investment, great production, better distribution and better logistics. So, we have a challenge," the FM said. Which begs the question: What the hell were you and your cronies in government doing for the last 10 years? The government has stockpiled over 75 million tonnes of grains when the mandate is for 28 million tonnes. Thus the government is guilty of hoarding grains, causing prices to rise. This is a criminal offence. Why was salt selling at Rs 150 per kg in the eastern states just a couple of days ago? The lies do not end there. Heads of Central Public Sector Enterprises were summoned to the Finance Ministry den at North Block in Delhi and ordered to pay higher dividends so that the fiscal deficit does not shoot up. Oil companies ONGC and Indian oil and the gas provider GAIL were there as they are sitting on large cash piles. We were told that these companies were making huge losses because of subsidies so fuel prices were raised, feeding into electricity bills and airlines losses. Lies cannot fool us all the time.
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