The Hindu Business Line : How to survive the price hike?

Price rise is not an overnight phenomenon. It is a fallout of the depletion of PDS stocks in FCI's godowns and the lack of food security caused as a result of the sufferings of the small and marginal farmers. The practice of giving ad hoc relief to farmers before Assembly elections cannot solve the problem, and power subsidy only helps the big farmers.

Cooperatives are in bad shape. And rural credit is on the decline, as bank managers are more concerned about NPA levels.

Banks also charge compound interest from the distressed farmers, who ultimately become victims of local moneylenders. Lack of power and expensive seeds, which include genetically modified varieties, have added to their debt and distress.

All these factors have led to the fall in farm production, making it clear that there can be no food security without the security of small peasants. Short-term policies should be conducive to such farmers, helping them to turn their hard work and limited resources into sustained bountiful harvests.

As the standard of living has gone up in the wake of a resurging economy, demand too has gone up. But, unfortunately, supply of quality products has not kept pace, paving the way for inflation.

Though the recent crude oil price hike was inevitable, much of the fuel price rise is because of the Customs and excise duties and refining margins of oil companies.

The duties in India are higher than those of its neighbours. Our over-dependence on imported crude oil, controlled by international cartels, is one of the main reasons why any hike in its price triggers inflation..

Despite the various oil shocks,, we have not made much progress in finding alternative sources of cheap fuel for our transport, industrial and domestic needs. Wind energy, Jatropha (available in MP, Rajasthan and Gujarat) and ethanol may be seen as alternatives.

T. S. Sundareswaran,

Consultant, New Delhi.

The price rise reflects the failure of the Government's farm and food policies. Whenever some problem arises out of paucity or plenty, the Government resorts to knee-jerk measures. It has now banned the export of pulses, the import of wheat by the private sector, and so on. Though these could have some effect, the Government should be more concerned with their long-term impact. Why not rollback the price hike on petrol, by cutting the tax.

The Government should look at innovative tax reforms and widening the net. It should formulate policies that ensure stable prices and a steady income for the farmers.

A. Jacob Sahayam, Thiruavananthapuram

Responses to Sticklish Issues dated June 19

In the present-day world, where people are running after money, it is heartening that Mr Bill Gates, the world's richest man, is stepping down in 2008 in order to focus on his long-cherished desire of philanthropy. Already, the Bill and Melinda Gates Foundation is doing a yeoman service in the field of public health in developing and under-developed nations.

Truly he is a sanyasin in coat and suit. His example will be an eye-opener to other multi-millionaires to use their wealth for the cause of the poorand the sick.

Mr Bill Gate's decision goes to prove that humanism has not died.

S. Nallasivan, Tirunelveli

More Stories on : Economy | Sticklish Issues

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Are we doing enough to renew our farmers' faith in life?

How to survive the price hike?

Road to Common Proficiency Test

Converting voice into words

In the middle of adversity

`One needs to be grounded in solid principles'

A banker's dilemma

How to assess independence of independent directors?

Just Do IT

Is there discrimination between the salaried and businesses?

Age of the virtual robbers

How Keynes' ideas got abused