Price hike a major issue, 16-30,2013, NOV , JUST IN PRINT

Price rise is one of the most ticklish current problems. Whenever we go to make some purchases in the market, we learn to our great disappointment that the prices of most of the commodities have risen. And sometimes quite exorbitantly. There are several reasons for this steep rise in prices.

Prices of all commodities are rising almost daily. For what you buy a commodity today, you cannot have it on the same price a few days after. The hardest hit on this problem is the salaried class. The businessmen and the traders meet out the problem of dearness by earning larger profits.

The labour class too charges high wages and has a low standard of living, so they, too, anyway cope with the rising prices. But the salaries often remain fixed. The rate of increase in dearness allowance is so low that it hardly meets the rate of rising prices. The condition of the salaried class in the private sector is all the more problematic.

An onion, today being compared with diamonds indicates its value for an normal household budget. Though price rise of all the essential commodities, inflation and depreciating rupee are making headlines these days but rise in the price of onion is catching everyone’s eye, as it is an essential ingredient in almost every food item prepared at Indian home daily. Owing to this, price rise of onions quickly becomes a political issue and a vote fetching agenda by the opposition.

After China, India is the second largest producer of onion and enjoys 19% share of the global onion production. Maharashtra and Karnataka are the chief onion producing states in India and contribute near about 45% of the total production of onion in India.

But this year again the situation is same. Speculations are going on that traders might have increased the price to earn profit. They are actually exploiting and taking advantage of the seasonal shortage in supplies. Maharashtra, the chief state producing onion has been asked for a regular supply of onion. It should intimate if there is any obstruction in the supply chain.

Stocks are low after a drought last year in Maharashtra state, the top onion producer in the country. And there have been reports that this year’s crop is damaged in some pockets because of heavy rains , but that’s just a few thousand hectares.

It is getting so bad that the government has had to cease its mantra of buy less, export more for other costly commodities and import onions for Indians to cook their classic dishes.

Television channels and other media have hyped the 100 rupees per kg fear this month, busy reporting how onion prices are bringing tears across the country. That prompted consumers to buy more and advance purchases. The consequence of this unchecked rise in prices has been disastrous for the people. The wage earners have been hit hard by this rising trend of prices.

The exorbitant prices of essentials commodities including the local vegetables are ruining the lives of people from the low income and middle income group. Consumers have faced a sharp rise in prices of staple food items such as pulses, sugar and edible oil.

Besides the rise in prices of almost all essential commodities, the hike in prices of LPG, kerosene and petrol has added to their woes.

Consumers allege that prices of essential commodities goes on changing every month in the market and the common men are in a fix over frequent change in prices of commodities.

Rising prices of essential commodities like wheat, rice, sugar, ghee, mug dal, masur dal including groceries and vegetables have thrown family budgets of the common man and people below poverty line into disarray. There is dissatisfaction among the common men with the fact that the prices of some of the essential commodities have been revised further.

Prices of varieties of vegetables in the vegetable markets were soaring. Prices of Brinjal, onion, cucumber, bhendi besides fruits have also gone up. Common men have started feeling the pinch of the price rise in vegetables and other essential items and those who have nothing to cushion the effect are cutting down on their monthly intake on other eatables.

There are several causes for this continuous price rise. Firstly, the population of the country is increasing while the agricultural and industrial production is not keeping pace with it. The inevitable salt is that the demand for various goods has increased. Secondly, unscrupulous businessmen create artificial scarcity by hoarding goods and selling them in black market. Thirdly, there are occasional droughts in some parts of the country resulting in shortages and floods in other part of the country and consequently the rise in prices. Frequent strikes and lockouts adversely affect the industrial production. The hike in the price of oil products from time to time contributes to the rise in prices by pushing the cost of production up and also increasing transport charges of goods.

The government has been trying to hold the price line. It has taken over the wholesale food grain trade. Rationing system has been introduced to assure the supply of food grains, sugar and edible oils to all the people. Consumer cooperative stores and super bazaars have been opened to stabilize prices. The results, however, have not been very encouraging. The government has now armed itself with powers to detain the hoarders and black marketers without trial under the Essential Commodities Act but this too has not shown any tangible results. The correct remedy is to increase production both of agriculture and industrial goods.

Unless power supply position is improved, industries will not be able to run to their full capacity. Again power is needed in agriculture also. The immediate need of the country is to have consumer resistance movement which should see that the retailers and the wholesalers reduce their margin of profit.

Rising prices encourage hoarding, profiteering, black –marketing and corruption. They discourage export. They cause devaluation of currency. Lastly, they seriously disrupt equitable distribution of wealth. Exploitation,hoarding,speculation all in the absence of an assuring regulatory for all essentials,food,oils,foodgrains and even vegetables for the common man.This should be demanded by us in the manifesto of the parties in future elections.

Now let us come to the contentious issue which is common to all the commodities price rise and bone of contention between the government and opposition parties that is forward trading. Now some people will criticize me of knowing very little of the commodity trading, but my only point is why do you need speculative trading on the essential commodities, when you could have such trading on nearly each and every finance vehicle like equity shares, currency exchanges etc. The forward trading increases the speculation in markets and people who are really not in the supply chain of these commodities get into it and unnecessarily disrupts the chain leading to disparity in normal price mechanism of these commodities.

The main reason for sky-rocketing of prices is the unabated rise in population at an alarming rate. All this expenditure pushes up the rate of living. Those who can afford, also purchase luxurious items like the refrigerator, air conditioner, desert cooler, geyser and other such gadgets. There is also a lot of wastage on parties, dinners, inaugu­ration and other functions and on canvass­ing, publicity and propaganda during elec­tions. The hoarders, stockiest and black- marketers also push up prices by causing artificial scarcity in the market. Wars and arms race also lead to shortage and price- rise.

It is a pity that even more than forty five years after independence, most of the Indians are still leading a dog’s life. Only some lucky ones roll in luxury. The government should take some drastic steps to keep prices under control.

The problem is very intricate and horrible. Drastic efforts shall have to be made by all concerned. Unless political parties, government, farmers, laborers, government employees, traders and the businessmen and the consumers all give up their narrow selfish ends, the problem cannot be solved.

Increasing of agricultural and industrial production, proper distribution of the commodities, safeguarding them in the stores, paying taxes to the government without any evasion some of the measures which if applied honestly will not only check the trend of rising prices but also bring them down.

Let the government take initiative to bring down the prices. Deficit budgeting and floating of paper currency should be stopped and such arrangements should be made which would ensure the proper supply of things so that tendencies of hoarding and profiteering may be eradicated. The price rising then shall stop.

Siddhartha Shankar Mishra,

Sambalpur, Odisha