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Unless higher demand is met with incremental supply, and cost efficiency is built into production, there will be little respite from high food prices.
Inflation, in general, and food inflation, in particular, are stubbornly stuck at elevated levels, causing extreme hardship, especially to the poor. A recent Assocham analysis shows prices of such essential commodities as milk, wheat, pulses, eggs, fish and meat, as also tea and coffee — all food items of mass consumption — have gone up, on an average, by 18 per cent in the 12 months to August 2010, even as the per capita income of the average Indian went up by a mere 10.4 per cent (from Rs 40,141 to Rs 44,345) during the period. The purchasing power of the aam aadmi thus stands considerably eroded. The situation on the ground could be worse than the numbers suggest, for the Assocham analysis may have ignored the skew in the distribution of incremental income.
As is common knowledge, averages mean little when the distribution is uneven. There is nothing to suggest that the incomes of a vast majority among the poorer sections have risen by 10 per cent during the period. In the event, those unfortunate millions are far worse off than the others. The first thing they will compromise on is the volume of food intake; unfortunately, it is they who are also nutritionally challenged and desperately deserve access to food at affordable rates. The tragedy is that no one in the government has any clue about how to tackle food inflation, which has been raging for about two years now. If New Delhi is enamoured by the soaring Sensex and GDP projections and perceives them as the only index of the nation's economic health, it is time to raise an alarm.
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