Last nail in the coffin for UPA - Rising Prices

Inflation shot up to 6.68% to touch its highest levels in past 14 months. The situation is getting worse day-by-day and the government is helplessly using frivolous measures to put a leash to the rising prices. The Aam Admi UPA Governement doesn’t seem to be working for the common man in whose name it had ousted BJP from center four years ago. They may have launched few Flagship Programs to help the lower strata of the country but the implementation facts and ground realities are widely known that the programs have failed to produce the intended impact. Now, as the 2009 elections are approaching, they are left with little time to chalk out any long term plan and that is what prompting them to play political gimmicks like farmer loan waiver or 6th pay commission report implementation. At the time of budget I did comment in my budget review that FM has actually done nothing for the Agrarian Sector which is long deprived of a real visionary step for the revamping of its dilapidated foundation.

Experts say that increasing fuel prices and slump in global economy are the main attributors to this cause but such ideas seem to be a whirlwind response trying to categorise the problem with utter airiness. The steps taken by Government are too harsh and illogical and could prove to be a boomerang for the economy’s health. Liquidity is not at all a contributing factor and raising interest by RBI would go in vain for sure. Fixing minimum export prices (MEP) for Basmati and other premium rice could cause serious loss to rice exporters and wouldn’t help curbing prices in domestic market too. It could also hurt the credibility of exporters in the overseas market. The need of the hour is to ensure availability and moderate prices for non-basmati rice. Leave aside the cereals, at least vegetable prices shouldn’t go up like this as the major chunk of such items are produced in near by areas and doesn’t involve any transportation cost.

We have always been bullish on Indian Economy but does economy mean only industries? Certainly not, but the actions of federal government shows something like that. At least the ill-measures to handle the problem were not supposed from a government which boasts a bevy of Economists (FM/PM combination, known as great reformers of Indian Economy). Even a layman can comprehend that inflation in food prices can only be leashed through meeting out the demand and supply gap and by increasing production of food grains. Mr. FM, country needs a long term plan and support to boost farmer’s moral not tricky loan waivers. If you guys don’t want to do it for man on the street, please do it for yourself because your rival BJP is ready with the same sword which you used against them in 2004 and I am sure saffron brigade would leave no-stone unturned to pave a way for your ouster in 2009 general elections.