Prof. Arindam Chaudhuri
Hony. Dean, Centre For Economic Research and Advanced Studies, IIPM
For any country like ours, which houses the maximum number of poor households, any form of price distortion in basic commodities invariably remains a sensitive issue. And probably it is for this very reason it has been observed that citizenry has historically pardoned various elected governments of poor overall governance but has never pardoned any government for general prices mismanagement. And that is all the more reason, it becomes even more intriguing to analyse as to why the current UPA government has allowed the inflation to go beyond control and that too, at a point in time when the elections are ‘round the corner. On the face of it, it looks like that two reasons, i.e. complacency and miscalculation had been the villain of peace for the ruling UPA. For they could never pre-empt that the crude oil prices would spiral to this extent, and even if they had, then they had blatantly avoided it by thinking that they would be able to tide over the situation riding on the growth plank. This is also evident from the statements that are being issued from the Finance Ministry, wherein the onus of the inflation is put on crude oil prices!
Well, the fact cannot be denied that crude oil prices have created a havoc globally, throwing almost everything out of gear. But then, this is also true that the signals for such price hikes were evident from last year itself. Then the question that arises is why didn’t the UPA take adequate measures to mitigate the crisis back then? Was it that they were thinking that they would be able to peacefully manage their own tenure and leave the mess for the next government? Whatever might be the case, this cannot be denied that it is sheer lack of prudence and proactive thinking that has driven the inflation to insurmountable heights to touch a 13-year high! In fact, in one of my earlier columns, I wrote how this current global food crisis and resultant price rise has come as an opportunity to the ruling UPA government, wherein the tables could be turned in India’s favour for becoming the global food supplier. For India possesses every resource to become the world’s food bowl. But then it seems that the policy makers are content blaming the global crude price rise and passing the buck to the Reserve Bank of India to mitigate this monstrous inflation.
Hony. Dean, Centre For Economic Research and Advanced Studies, IIPM
For any country like ours, which houses the maximum number of poor households, any form of price distortion in basic commodities invariably remains a sensitive issue. And probably it is for this very reason it has been observed that citizenry has historically pardoned various elected governments of poor overall governance but has never pardoned any government for general prices mismanagement. And that is all the more reason, it becomes even more intriguing to analyse as to why the current UPA government has allowed the inflation to go beyond control and that too, at a point in time when the elections are ‘round the corner. On the face of it, it looks like that two reasons, i.e. complacency and miscalculation had been the villain of peace for the ruling UPA. For they could never pre-empt that the crude oil prices would spiral to this extent, and even if they had, then they had blatantly avoided it by thinking that they would be able to tide over the situation riding on the growth plank. This is also evident from the statements that are being issued from the Finance Ministry, wherein the onus of the inflation is put on crude oil prices!
Well, the fact cannot be denied that crude oil prices have created a havoc globally, throwing almost everything out of gear. But then, this is also true that the signals for such price hikes were evident from last year itself. Then the question that arises is why didn’t the UPA take adequate measures to mitigate the crisis back then? Was it that they were thinking that they would be able to peacefully manage their own tenure and leave the mess for the next government? Whatever might be the case, this cannot be denied that it is sheer lack of prudence and proactive thinking that has driven the inflation to insurmountable heights to touch a 13-year high! In fact, in one of my earlier columns, I wrote how this current global food crisis and resultant price rise has come as an opportunity to the ruling UPA government, wherein the tables could be turned in India’s favour for becoming the global food supplier. For India possesses every resource to become the world’s food bowl. But then it seems that the policy makers are content blaming the global crude price rise and passing the buck to the Reserve Bank of India to mitigate this monstrous inflation.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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