The Hindu Business Line : Taming inflation

Inching towards 8 per cent and climbing, inflation may overtake the projected economic growth of 8.5 per cent if remained unchecked. Increasing CRR, or curbing the export of certain essential items, suspending futures trading in a few commodities, action against hoarders and directing certain industries to reduce prices of their products have yielded few results so far. These steps may bring down inflation to some degree but it will be a temporary solution.

There is an urgent need for a long-term policy to address this problem. The present situation is not due to international pressures but the lack of long-term vision. The most important issue before us should be evolving a national policy on arresting and bringing down the rate at which India’s population is growing.

We are adding more than two crores of population every year and it is estimated that, at this rate, India will overtake China by 2030. Agricultural land is shrinking and is being used either for creation of infrastructure, construction of residential or commercial assets, or SEZs and industrial parks. A few years more of this, and it will be difficult to feed the nation.

The steep rise in crude oil prices is pushing the world towards bio-fuels. In future agricultural produce will be needed not only to feed the population but also for producing bio-fuel. Heavy investments must pour into agriculture for better irrigational and marketing facilities, efficient storage capacities and a system to ensure optimal use of produce, like ERP in the commercial sector.

Also, adequate infrastructure for R&D in seeds is needed to have a quicker second green revolution. We need not to stop industrial revolution but certainly we need to improve the quality and quantity of the agriculture produce from whatever land resources are available to us.

Dilip K. Raina e-mail