Article;
http://economictimes.indiatimes.com/features/financial-times/the-mighty-pinch-indians-spent-rs-58-trillion-more-owing-to-inflation/articleshow/9083318.cms
Comment;
The article points to the price movement since 2008. Form a farmers point of view we need to see that higher prices are translated in farmers profit. If it has positively impacted farmers' and farm labors' income whose composition is around 60% in Indian population then we can say that the growth in the last three year has contributed in reducing poverty and inequality within Indian-Economy. If it has not, we can say that growth has just benefited middle and upper classes in form of higher income and low consumer durables' prices in the last three years. Liberalization of the food sector is good for farmers and farm income but bad for unemployed people living in poverty without farms because there is no mechanism which can ensure parity wages in the un-organised sector. As far as food inflation is concerned India has sufficient stock of wheat and rice which the government can trade for food items which are deficient in supply. The government can barter the stock of wheat and rice stocks for food items whose share in food basket and price of food basket is high. However, FDI in retail is supposed to do the job in terms of supply of food items but it remains a paradox how the poor is going to pay for food if his income does not increase or if it increases but insufficiently. FDI in retail will increase the competition for creating stocks of food and will push prices up but if our income remains a constraint how the poor is going to be compensated, if not through wages.
http://economictimes.indiatimes.com/features/financial-times/the-mighty-pinch-indians-spent-rs-58-trillion-more-owing-to-inflation/articleshow/9083318.cms
Comment;
The article points to the price movement since 2008. Form a farmers point of view we need to see that higher prices are translated in farmers profit. If it has positively impacted farmers' and farm labors' income whose composition is around 60% in Indian population then we can say that the growth in the last three year has contributed in reducing poverty and inequality within Indian-Economy. If it has not, we can say that growth has just benefited middle and upper classes in form of higher income and low consumer durables' prices in the last three years. Liberalization of the food sector is good for farmers and farm income but bad for unemployed people living in poverty without farms because there is no mechanism which can ensure parity wages in the un-organised sector. As far as food inflation is concerned India has sufficient stock of wheat and rice which the government can trade for food items which are deficient in supply. The government can barter the stock of wheat and rice stocks for food items whose share in food basket and price of food basket is high. However, FDI in retail is supposed to do the job in terms of supply of food items but it remains a paradox how the poor is going to pay for food if his income does not increase or if it increases but insufficiently. FDI in retail will increase the competition for creating stocks of food and will push prices up but if our income remains a constraint how the poor is going to be compensated, if not through wages.
No comments:
Post a Comment