Inflate the government inaction

The only place food prices seem to be decreasing is in the mind of the government, which keeps claiming that food inflation will relax in next three-six months. It is a different matter that those three-six months have not appeared so far. Indeed, even a road-side tarot card reader might have done a better job predicting trends in food price inflation.

With every new story on food price inflation, new excuses are played out. The fact is that in almost all cases, it is the government that has either contributed to fuelling inflation— for example, by hoarding cereals— or has failed to read the early warning signals. As recently as last month, government food stocks were almost double that of the buffer requirements. This is expected to increase further with the new kharif arrivals, and with no feasible plans of offloading stocks that have been rotting for months. Even with vegetables, government action has been too little, too late. With the government clueless, speculators have had a free run on prices.