Don't expect food inflation to go down so long as Sharad Pawar remains food minister
Prasanna Mohanty | December 22, 2010
Going by Sharad Pawar’s words and deeds in the past one-and-half years, you can be pardoned for thinking that he heads the ministry for blackmarketeers and hoarders, rather than food and agriculture that he actually does. Look at his latest statement. When the onion prices jumped from Rs 20 a kg to Rs 70 a kg in one week, he said, “Onion prices will remain high for two-three weeks and the situation is likely to improve only after that”. What did he base his assessment on? Fresh arrival of onions in the market from Maharashtra and Rajasthan. And how did he explain the sudden spike in onion price? Unseasonal rains, of course. He didn’t say a word on banning export or importing onions to improve the situation. In fact, at an inter-ministerial meeting on Tuesday evening, Pawar actually rejected the proposal to import onions. Similarly, he didn’t say a word on why he didn’t make timely arrangements to avoid this situation given the fact that the unseasonal rains hit a couple of months ago. He and his ministerial staff had adequate time to prepare.
But then you don’t expect Pawar to do anything wise or sensible. There have been several instances in the recent past when he has actually acted against the interest of common man and the farmers whose cause he claims to be championing. Remember when the sugar price skyrocketed, he was accused of stalling import of raw sugar on the similar plea that he is using now: That farmers would benefit from hike in price. He knows as well as any lay man that such spike in price is a bonanza for the hoarders and blackmarketeers, not farmers. Food inflation has remained high, in double digit for most part of the past one-and-half years. What happened when, in January this year, media persons demanded to know what he intended to do about high prices of food grain, pulses, oil, vegetables etc? He dropped a bombshell by saying that the milk prices would be going up as there was a scarcity of milk in north India. And milk prices did go up immediately.
In August this year, when the attack on Pawar continued, his answer is worth quoting. He said: “The country has been fighting inflation since 1952, and every finance minister has faced the crisis. But, for last three years, the agriculture minister is being held accountable for it.” He went on to add that inflation was a “collective responsibility” of the central government.
That was not all. In February this year, he found another way to beat those crying foul over escalating food inflation. He said the middle as well as the upper middle classes were in a position to “bear the price rise”.
You would actually be foolish to expect anything better from Pawar. Disgusted with his performance, Devinder Sharma, noted food and trade policy expert wrote in his blog in March this year, by way of providing solution, that: “Any strong government, if it wasn't faced with the compulsions of coalition politics, would have removed the Food & Agriculture Minister by now. The Congress cannot wait any longer. It must get rid of Sharad Pawar, and you will see the prices coming down.”
Busy governing the ICC, the agency that lords over India's biggest spectator sport, Pawar has become just a spectator in the Food and Agriculture ministry.
Govt asks MMTC, STC, PEC to import onion
The government on Wednesday asked its three trading companies, including MMTC, to import onion, a step coinciding with abolition of import duty on the commodity to ease the crisis over spiraling prices.
"I met CMDs of three public sector companies MMTC, STC and PEC and asked them to look around for import contracts (for onion)," commerce secretary Rahul Khullar told reporters in New Delhi.
Cabinet secretary K M Chandrasekhar, who is personally monitoring the situation, earlier in the day asked the commerce ministry to "speed up" onion imports to augment domestic availability.
The government's concerted action follows a steep rise in onion prices, which soared from Rs 10-11 in June to Rs 70-85 per kg in retail markets across the country.
As part of measures to rein in onion prices, the government has already banned exports and abolished import duties on onion.
Import duty on onions scrapped as govt bids to choke price spurt
With onion prices skyrocketing to as much as Rs 85 per kg in some retail markets, the Indian government today said it has brought down customs duty on imports of the commodity to zero from 5 per cent.
"The customs duty on onions has been brought down to zero," Finance Secretary Ashok Chawla told reporters here today.
The step comes amid a sharp rise in the price of onions up to Rs 70-85 per kg in retail markets across the country from just Rs 35-40 a few days ago on account of damage suffered by crops in the key-producing states of Maharashtra, Gujarat and a few Southern states due to excessive rains, which has led to large-scale hoarding by some traders.
The steep hike in onion prices set alarm bells ringing in the government, which has imposed a ban on onion exports till January 15, 2011, with a view to increase availability in the domestic market. However, it is likely to take at least three weeks before the common man gets any relief from the measure.
"Onion prices will remain high for the next 2-3 weeks and the situation is likely to improve only after that," Food and Agriculture Minister Sharad Pawar said yesterday.
While Pawar had indicated the government did not have any plans to import onions to bring down prices at home, small 450-tonne consignments of the commodity from neighbouring Pakistan have been making their way into the country across the Punjab border since yesterday.
Compared to the exorbitant domestic prices, the price of the onions imported from Pakistan is just Rs 18-20 per kg.
A worried Prime Minister Manmohan Singh, whose government has been grappling with high inflation for much of the past year, has also stepped into the picture and asked the agriculture and consumer affairs ministries to take effective steps to rein in onion prices.
"The Prime Minister desires all necessary steps to effectively deal with the extraordinary price rise of onions and bring the prices down to an affordable level," an official source said, quoting letters written by Singh to the ministries concerned.
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