Inflationary Rise in Prices
THE recent spurt in prices of foodgrains and other articles of common consumption has caused serious concern throughout the country. Taking 1961-62 as the base year the index for all commodities in July this year, according to the Reserve Bank of India, was 14.2 per cent higher than the corresponding index in July last year. Food articles registered the sharpest rise by about 23 points during the months February to July, followed by agricultural commodities showing a rise of 15 points. Industrial raw materials, machinery and transport equipment and manufactures usually keep up anticipatory rise in prices , but compared to the price indices of these articles a year or two ago the recent trend seems to be extremely disturbing.
The present situation is particularly significant as the spurt, especially in foodgrains, has occurred at a time when the Government says that it is in possession of a buffer stock of about 9.5 million tonnes of food-grains and the shortfall in food production was not so glaringly disastrous. In a situation like this, with four consecutive good harvests, the Fourth Plan buffer stock target fulfilled and the public distribution agencies in foodgrains established, the Government cannot shy away from its responsibility by looking for alibi. Further, considering the fact that even in the worst famine conditions in the past the Government had not imported more than ten million tonnes of foodgrains, the present chaos on the price front sets the stage for serious rethinking about certain basic policy matters regarding the management of the economy as a whole.
It is unfortunatet hat right from the beginning the Government tried to underestimate the seriousness of the present inflationary rise in prices. Their reasoning and approach, as in other cases, have been mostly ad hoc in nature, harping upon the worn-out themes on seasonal factors such as flood, drought and so forth. The effort to characterise the present inflationary spiral as seasonal is resorting to the worst forms of "bureaucratic cliche". Attempts to justify the rising prices in India by quoting similar developments in western capitalist countries exhibit a grossly ignorant and callous attitude towards the basic problems facing the common people.
That the rise is not seasonal will be apparent from the fact that the seasonal price rise usually noted is only by a few points, whereas this year the prices have moved up rapidly and significantly, the more so in