Recent spikes in staple food prices resulting from the invasion of Ukraine have once again highlighted the difficulty faced by low-income countries that rely on imports for a substantial portion of their
Expressing concern over rising food prices, finance minister P Chidambaram said he had not forgotten the corporate sector and defended the Rs 60,000 crore farm loan waiver on the ground that the money would flow to a distressed segment of the productive sector where the output was either stagnant or falling. "One of the reasons why inflation is still a threat is food prices in India,' Chidambaram said, adding that after a long gap, India has become a marginal importer of foodgrain, which is a dangerous sign. "Because we are dependent on import, we are subject to world prices... No country with as large a population as India can be dependent on imports (of foodgrain),' he said at the postbudget interactive session with industry chambers. Since April 2007, prices of wheat in the global market has risen by 88% and that of rice by 15%, he said. "Taking all this into consideration, we came to the conclusion that farmers' distress called for an unorthodox response... the response was farm loan waiver,' Chidambaram said. The wholesale price-based inflation rose to 4.89% from 4.35% in the previous week. Responding to the issues raised by the corporate sector, he said, "I have not forgotten the corporate sector. Despite the advice given by my chief economic advisor and suggestion from Economic Survey, we accepted your (corporates) demand of retaining peak customs duty rate.' He said excise duty reductions and relief given in personal income tax would help in spurring demand for consumer goods and benefit the industry. Exports grow 20.5% in January India's exports showed a healthy growth of 20.47% in January this fiscal over the same month last year, but expanded by a single digit figure of 7.66% in rupee terms due to pricey domestic currency. Exports increased to $13.14 billion in January 2008 from $10.9 billion a year ago, while imports grew by a huge 63.57% to $22.50 billion, leaving a trade deficit of $9.36 billion. PTI
The State Food and Civil Supplies Minister, Dr Nazrul Hussain today told the Assembly that deficit production and increase of price at source due to rising demand were at the root of the price rise in essential commodities, especially foodgrains, in the State. Replying to a question raised by Ananta Deka of CPM during zero hour, Dr Islam said that the current price rise was a national phenomenon and affected Assam and the North-East more because of the transportation costs. The Minister said that his department was coordinating with district and subdivisional administrations for properly monitoring the developments so that unscrupulous elements could not take advantage of the situation. The situation in places like Delhi, Kolkata, Hyderabad, Jaipur, etc., were also kept track of and constantly compared with that of the State. "Deficit production in rice, dal, wheat, mustard, etc., and the lowering of Government subsidies are having an impact on price rise. The recent export of 5 lakh MT rice to Bangladesh has also added to the growing demand in the source States,' Dr Islam said. "Common rice which was sold at Rs 12 a kg in Kolkata on October 8, 2007 shot up to Rs 14 on February 8, 2008. The same rice is being sold in Delhi at Rs 17 a kg. In Guwahati, common rice which fetched Rs 12.50-Rs 14 a kg in October last year, was sold at Rs 14-Rs 16 in January,' he said. The Minister further said that the rise in import prices of various edible oils was contributing to the price rise. "India imports a sizeable quantity of refined vegetable oil and refined rapeseed oil from Malaysia, and recently there has been considerable increase in the their prices. Again, mustard oil produced in the country has also become costlier,' he said. Dr Islam said that the department, during 2007, registered 726 cases regarding the public distribution system (PDS), which "showed that we are taking steps to streamline the system.' Moreover, the Bureau of Investigation of Economic Offences (BIEO) has been entrusted with the job of making an inquiry into the PDS scam that rocked the State last year. Dr Islam said that the six per cent railway fare cut for the North-Eastern States would come into effect from April only.
In its bid to woo the farming community, the Telugu Desam Party (TDP) is now planning to launch another programme across the State on the lines of Eruvaka. "The TDP has got an impressive response from the public, in particular, the farming community when our party leaders took out several road shows as part of the Eruvaka programme to enlighten farmers on the need for enhancing minimum support price (MSP) for paddy to Rs 1,000 per quintal. The party has now decided to launch similar programme with another name to raise agriculture-related issues further in the coming months across the State. And the whole objective is to exert pressure both on the Centre and State government to implement recommendations of M. S. Swaminathan Commission as well as Commission for Agriculture Costs and Prices (CACP) in toto and in particular, the MSP for paddy and wheat. Hence the party will launch a programme, whose name will soon be finalised,' TDP president N. Chandrababu Naidu told reporters on Wednesday. He was here to attend a marriage function of TDP senior leader Somireddy Chandramohan Reddy's daughter. Lack of clarity Claiming credit for the Centre's decision to waive farm loans, Mr. Naidu said that the Finance Minister would not have announced it, had TDP and UNPA not taken up the farmers' cause. "As a whole, the incentives announced in the Union budget are peripheral, while certain aspects lacked clarity. For instance, the definition of small and marginal farmers is a broad one. We want the Government to adopt a new definition as there is a different definition for marginal farmers in dry land, non-irrigated and irrigated lands.' When asked whether the TDP is still committed towards an integrated Andhra Pradesh, the TDP president ducked a direct reply by taking a dig at the Congress on separate statehood to Telangana. "Let the Congress first spell out its stance on the issue clearly. As the single point agenda of the Congress is to defeat TDP in elections, the party forged an alliance with Telangana Rashtra Samiti president K. Chandrashekhar Rao, who left the TDP on the separate statehood agenda after he was denied a ministerial berth. The ruling party had an understanding even with naxalites and cheated both of them along with its electoral partners CPI and CPI(M).
Chief Minister Tarun Gogoi, while presenting his Budget for 2008-09 today proposed abolition of Value Added Tax (VAT) from rice, pulses, atta, maida, suji and besan.
The government is planning to increase its allocation for food to all the public hospitals because of the price spiral of essentials.
The Wholesale Price Index numbers for the week ending March 8, released last week, showed that the inflation rate surged almost a percentage point compared to the previous week.
Lack of buying interest, inadequate storage spaced cited as reasons for the fall in prices.
FOR India, the crash in global commodity prices comes as an answer to a prayer.
