`Government`s bad economics behind price rise`

Shashank Verma

New Delhi: No government deliberately forces price hike, is what Dr Sanjay Nirupam, Member of Parliament, Mumbai North, and Secretary, AICC, said on the show ‘Yuva Mange More’ – part of Zee Media series Bharat Bhagya Vidhata. The show, on which senior journalist Amit Goel was also a guest, raised the pertinent issue of price rise and inflation that is affecting the common masses in this country, and deliberated upon possible solutions. “I accept that there has been a surge in inflation recently. According to me, the Minimum Support Price (MSP) is one of the main reasons behind inflation. By the time the foodgrain reaches the market, its cost is double that of the farm stage. Also, unlike today the cost of production was much less earlier. And moreover, around 7 to 7.5 lakh tonnes of foodgrain rots every year. We are concerned about it and are trying to take steps to avoid the situation. Further, we have introduced the Food Security Bill to tackle the same,” said Nirupam on being asked by anchors Annant and Saurabh about the reasons behind inflation. Countering Nirupam, Goel said, “I do not think MSP is the reason behind inflation. Market price of the foodgrains is more than double that of the MSP. Also, over the past seven years domestic production has declined and imports have gone up.” In his attempt to safeguard the credibility of the Congress party, Nirupam said, “We have faced a global recession (2008-09). Earlier, more than 50% of the population was under poverty, while now it is less than 22%. We are also giving the right to food through the Food Security Bill. Moreover, imports have also increased which are also responsible for inflation.” Criticizing the government, Goel said, “We have a weak economic structure, which crumbles at the time of recession. Industrial development is collapsing. When there is no demand, then why are the prices going up? The government lacks proper decision-making and its bad economic decisions are the reason behind inflation.” “We had introduced the Food Security Bill over four years back. Many amendments and discussions took place, which took a long time. As the government had promised the bill, so we have started working on it at much faster pace,” Nirupam said, defending the government over delays in the passage of the food bill. Goel, on the other hand, said, “We lack competitive manufacturing. We do not own any of the products. We have shortage of everything; shortage of economy, shortage of capital, shortage of governance etc. We have to pay tax on each and every thing.” Spelling out the solutions Nirupam said, “We have sufficient production. Yes, I accept that we need to focus more on market manufacturing, production and jobs (to counter inflation).” “Auctioning the natural resources, subsidizing power and investing in infrastructure can be some of the solutions to the problem of inflation,” Goel concluded. (The episode airs at 10:00 pm on Thursday on Zee News channel.)