Has people's purchasing power fuelled price rise?

Remember .. Mr Bush, the-then President of USA had told : price of food grains globaly is rising as people of India and China are eating more ? He was then rejected by his countrymen ?

Now, back home, our Agriculture Minister is saying something like that. Actually he did not care to handle the price rise and now talking rubbish and ridiculas .. !!

This crisis is purely man-made. He directly or indirectly encouraged this situation. Questions :

 why export of (such) items were allowed ? Even when a mis-match identified, imports have no been done ? Why the Public Distribution System (PDS) was not streamlined ? Why not buffer stock of such items created in advance and in anticipation ? Why more farm-lands were / are not covered by Irrigation/ Minor irrigation ? Why action has not been taken against the hoarders ? In such a situation : why not 'Future Trading In Commodities' not banned in basic commodities at least temporarily ? Why timely discussion was not held with State Govts to tackle the situation, Why surrender to the situation where profiteers are let loose to take advantage ?

Rashmi,

The implementation of economic policies are always aimed at increasing the purchasing power of the people thus increasing Gross Per Capita income.  The increase in purchase power stimulate demand and helps the industries to improve the supply to balance the demand and supply curve. The economic stimulas or providing employment under rural employment developement scheme provides income at the hands of unemployed people and it would not cause price-rise. Last year, the monsoon was below the normal and unseasonal rains and floods caused crop damage and impoact the production of pulses and other food articles. If you analyse, supply is far less than the demand and hoarders are taking advantage of the situation.  The Government failed to identify this imbalance to import the items to cover the mismatch.

The inflation may also result in producing paper money, i.e printing currencies without SDR reserve. Though inflation is due to money supply but this is not the cause of price rise for food articles.

its unfortunate that mr.shrath pawar has come up with such statement to cover our collective failure to bring a efficient distribution and logistics system.it is somewhat similar to what once america acclaimed that excessive consumption in india china are creating shortage .instead of coming up with insensitive conclusion they might have stressed upon the need of organised distribution channels so that humungeous amout of edibles that is destroyed in meantime of storage ,warehousing and transporting can be prevented .

Well said Mr. Nagarajan, it is high time that these irresponsible ministers, who make a fool of average Indian citizen, should be taken to  task. I find the media (Electronic & Print) also responsible for devoting more time to non -issues like Shah Rukh Khan and Rahul Gandhi's visit to Mumbai rather than highlighting the plight of millions and millions of Indians under the spiraling food prices. 

It IS hilarious. A fortnight before, Union Ministry of Agriculture released tens of thousands of tons of wheat to flour mill owners.  Earlier they had offered at 1580  and there were no takers.  Last fortnight, they reduced the proce by 200 and many people lapped it up.  When you asked the mill owners later as to why there was no reduction in price of wheat products like atta and maida, the flour mill owners simply said that the wheat supplied was mixed with low quality wheat which was useless.  So in effect, they did not get any large benefit to pass on to end user!!

It is the middlemen and hoarders who are responsible for price rise. 

The benificieries of the 6 th pay commission is central government employees and that of NREGS is below poverty line community. There are huge population not covered by these two, they are mostly effected by this bad impact of food inflation. Above two class might have compansated to some extent from this food inflation effect. I there fore do not find any merit in the statement given by our H'ble Agricultural Minister.

Sharad Pawar, is trying to become an economist and the argument put forward to justify the price-rise is hilarious.  Fortunately, he was addressing this to his own party people and hence there was no challenge.

The price of food articles largely depend upon supply and demand. In India, almost, 40% of the people are below the poverty line and they are the ones mostly impacted by the price-rise.

I think Ms Rashmi is unaware about the facts on NREGA. Mr. John Drez an able economist who pioneered the concept of NREGA has himself come out with an audit report of NREGA, where it was found out that only 30% of the allocated money has actually reached its target audience.

This means that there is a 70% leakage of the allocated fund in the system which has been gobbled up by scrupulous contractors, middlemen and politicians.

So, the notion of high purchasing power in the rural sector is a myth propagated by political parties to further their narrow ambitions.   

It is an irony that a senior cabinet minister who handles such an important portfolio in the central government, gives such ridiculous and absurd statement. It seems either he is not competent enough to chair such an important portfolio or he is of the false impression that the people of this country are morons who can be taken for a ride to fulfill his selfish political whims and fancies.

Mr. Sharad Powar is more concerned with the functioning of IPL, that's the reason he is worried to the hilt about foreign players in IPL and he has an able and equally competent politician by the name of Bala Saheb Thackrey with whom he shares his evening tea and discusses his grave concerns.Damn to rising food prices. 

Lousy ministers/lousy politicians/ meek proleteriate. That is what India and we Indians are all about.