Inflation

CPI food price inflation has been on the decrease for the last several months. It has come down from its
peak of above 15pc in April to 8.6pc in July. On a year-on-year basis, it is down from 16.2pc from a year
ago. If we go a little beyond, food inflation has slowed down considerably from the 10-year high of
21.2pc in January 2020. But for ordinary people, inflation — food and non-food — is not just another
number; it is something that makes it hard for them to put food on the table and send their children to
school. So they remain unimpressed when the government tries to shift the blame for rising domestic
prices to an escalation in global commodity markets because of Covid-19 or some other factor. It is, after
all, the government’s primary job to ensure that all citizens are able to access basic food at affordable
prices.

A report in this newspaper the other day had highlighted the plight of the poor-middle-income groups
because of the failure of the government to effectively check the prices of essential food items such as
vegetables, pulses, milk, sugar, edible oil, wheat flour, etc. The increase in the prices of staples places a
massive burden on low-income households which are estimated to spend more than half their income
on food. Soaring price inflation has drastically eroded the purchasing power of the common man amid
widespread job losses, and negative wage growth because of debatable economic stabilisation policies
and the impact of Covid-19. Even though the economy is bouncing back and has posted a modest
growth, its benefits are yet to trickle down to the low-middle classes. Although the government is trying
to help people through cash disbursements to the poorest segments, improving the supply of staples
through imports and passing on only the partial impact of the hike in global commodity prices to
consumers, food inflation continues to tax and test the pain threshold of the majority.

Ineffective market governance, frequent disruption in supply chains, and profiteering by investors and
hoarders are a few problems that the decision-makers need to address intelligently on an urgent basis
to mitigate the impact of the surging food prices. These areas are the responsibility of the provinces and
it is no secret that the provincial governments have utterly failed to fulfil their obligations. We have
been hearing the provinces complaining about the absence of a legal framework to arrest and punish
profiteers and hoarders for the last many years. But none of them has thought of legislating to develop
this framework. Why? The question is not difficult to answer.