Can somebody explain me please !

Grocery/Vegetable shopping was never this dreadful for me, when I visit  markets or the food malls to purchase the weekly Ration and stock up my refrigerator with Fresh vegetables. Just the thought of 38 Rs/Kg Tomatoes or  green peas at 140 Rs/Kg, a teeny weeny bunch of coriander leaves  getting dearer with the price tag of Rs 16, while the substandard quality Methi  that will leave  me poorer by 20 Rs, gives me nightmares. The least said about the  onions and potatoes, the better.

The horrible shooting up of prices of necessary commodities is alarming, with the Cooking gas( LPG) getting costlier , and so are the pulses, the legumes, the condiments, spices, fruits, and above all the local transport fares, everything becoming dearer and dearer. According to the figures  provided by NetIndian , the prices of pulses were up by 34.14 per cent from a year ago, milk by 21.12 per cent, fruits by 13.55 per cent, rice by 6.45 per cent, cereals by 5.11 per cent, wheat by 4.21 per cent and vegetables by 4.32 per cent.How is a common man supposed to survive ?

I am sure, like me, you too must have heard or read  what all the politicians, the wholesalers, the vendors, the mall owners etc. are ranting about the system, each alleging the other person for being responsible for the unreasonable  hike.

Now since I am not good at understanding economics , can anyone please explain me the reasons given by those in power, regarding the unreasonable hikes?

1: Short supply and increased demand…

The population do play a significant role in disrupting the balance of demand and supply, no doubts about that, but can someone explain me what are hundreds of sacks of sugar , wheat etc are doing in  dock or warehouses of India, if there is such a shortage of these commodities in market? Who is responsible for the black marketing of these ? Is the supply really short or is it being artificially inoculated  by people having vested interests ?

2: Fuel price hike in world markets: Now I can understand the global hike in petrol and diesel rates impacts the economy of India too. But can somebody explain me why is petrol and diesel used in fleet vehicles or the goods trucks? Why isn’t CNG used instead, its half the price of gasoline, it is  more environment friendly and is commonly used in developed countries like US, for the fleet vehicles or transport trucks. Secondly not all the transportation of  vegetables and fruits occurs via petrol and diesel driven trucks. There are carts used, CNG driven tempos and autorikshaws are used too. So isn’t quoting petrol rates hikes in global market the reason for inflation, sound bit illogical? I may be wrong, so kindly correct me !

3: Bad Monsoon last year: Since India’s economy highly depends upon the agriculture, which in turn is at mercy of Monsoon, this reason might sound convincing. But wait a minute, read what India Reels have to say :

Government announced a drought in India which is assumed naturally to be the main reason behind the price rise. The facts, however, say otherwise. The possibility of a drought became apparent barely in late July 2009 and its effects – a below average crop of paddy, pulses, potatoes (Kharif crop) and sugar – would only begin to be felt with lower arrivals in the market from October onwards. Last year’s drought could account for the price rise over the last two months; prices however have been on the rise since the beginning of 2008.

4: Surge in purchasing( And Spending ) power of Middle and upper Middle class sector:

I guess this could be one of the most  debatable but sadly, a valid reason behind the inflation. Previously a common middle class lady, would hold herself back  to pick up over priced vegetables, and would think of substitutes. For eg. if tomatoes got dearer, she would avoid stocking it in regular quantities and would rather opt for lemons or Tamarind to bring the tangy-ness in her meals.  In past, if  Moong dal prices would go up, the family used to rely on other Pulses. Now its just the opposite. If sugar price is up, we stock more sugar , dreading its disappearance from market.Though nowadays almost everything cost a bomb, its hard to shun everything from the pantry but stocking pulses, vegetable oil , and other comparatively  slowly perishable things like potatoes and onions  is causing a ripple effect.  But does anyone agrees to the funda, that if consumers stop buying food commodities like sugar, dal, pulses that are overly priced, it could send a clear message to those hoarders in wholesale market , who stock these in huge amounts just to trigger inflation. What about a mass boycott of these essential commodities for few days? Would it help to combat the price hike or would it make matters more worse for genuine farmers and retailers?

Can’t there be more Farmers market , where the locally grown crops are sold by farmers directly, with no intervention of politicians and middle man.

The government could least allot places for farmers market, or better still, cant  housing societies organize such  temporary markets where the local farmers can sell off their crops  in  societies.

Regarding spending powers, here is one incident that happened last week that will prove my point.

After the News channels bombarded us with Petrol and diesel hikes , and the hikes in Rikshaw fares, I expected a daily tussle  with those ummm..not so modest Rikshaw wallahs. So while I waited for a Rick outside my home, I saw one approaching , and a  lady got down from the rick. As she and the rick wallah were working upon the amount of money as per meter, I was shocked to see the lady willingly paying more than actual rates. Assuming myself as a good citizen I pointed out that to lady, and she gave me one darn look but said politely ” Oh Dear, I sympathize with poor people its just matter of few rupees, and if affluent people wont help these poor, who else will? Besides didn’t you read the newspaper that states Petrol and diesel prices have surged.

I felt this strong urge to shoot back at her with ” Oh Dear, I sympathize with your hardworking husband and if educated people like you wont understand the core problem who else will? Besides didn’t you checked the label on Rick, that reads  CNG ? It was not  running on  Petrol or diesel !

But I stopped myself from uttering single word..sigh !

5: Growing Fetish of Indians for Imported food

Why can’t government concentrate on improving quality of fruits grown in India rather than importing those genetically tampered fruits or vegetables.Does transporting Apples from Kashmir cost more than importing from Chile or Washington ?By the way are you aware that those bright red looking Apples that you happily purchase at 140 Rs/Kg are actually more than 5-12 months old? Yeah as many of you might be knowing that these fruits are coated with shellac and carnauba wax for that extra sheen and to protect them from getting spoiled , and this wax coating  could be got rid only after scrubbing the apples with soap and water..now who does that to fruits?

Does oranges imported from US  requires less fuel than when transported from Nagpur or Nasik? Why is there more demand of Golden bananas than local Elaichi variety? Why do we seek seedless dates from abroad if you  can grow these in arid climatic conditions of  Northwest Rajasthan. Why do we generate demands for imported goods, when we know that majority of those are not organically grown and have highly tampered genes. Our purchasing power have shifted the demand from locally grown products towards  the imported ones. Since goods anywhere outside India are costlier than India(If sources are to be believed , In India, there is anywhere from 8- 50 % of custom duty on the fresh fruits and vegetables from abroad), so it  doesnt require a great Mathematician to calculate that how could this “Imported Food” fad could be  harmful for our home budgets. Yet we  generate huge demand, and then cry foul about inflation.

6. Liquidity shortage ( As pointed out by Deputy Chairman of Planning Commission Montek Singh Ahulwalia(Source:Hindu.com)

The system was facing liquidity shortage owing to the more than Rs. 67,000-crore outgo for payment of the fees for 3G spectrum, and another Rs. 38,000 crore towards the spectrum fees for broadband wireless spectrum. Besides, corporates were paying advance taxes for the first quarter this fiscal.

Is going for 3G spectrum more necessary than to imply corrective measures to DEFLATE inflation ? Since the government  blamed  lack of ample Monsoon last year for the shortage, wasn’t it more practical to ban export of such commodities  or upgrade  methods of agriculture in India to harvest more goods ? Is having a world class wireless spectrum more important than curbing inflation?

7.Corruption: Well you go anywhere in the world, in any  official or commercial department, you are bound to bump into at least some  corrupt people. The way people in power are getting rich in current  scenario, makes me ponder why isn’t inflation pinching their pockets?

I  seek explanations for  many more things like that, but I guess I have to stop myself at one point or other, since  its hard for a naive person like me to understand the nitty gritty of economics, inflation, market talks, GDP, global influence and commodity markets, fiscal policies etc.

I just want to know one thing……Are there any solutions?

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17 thoughts on “Can somebody explain me please !

  1. :))) lol…madam this has been India for as long as I know there is always one gentleman getting away with corruption…look back ask your mother your grandmother they will have one frustrating moment atleast in their life…..solution solution is what everybody is saying looking at the problem….solutions dont come walking and knocking on the door…ppl have to move and realize and stop corruption which we great
    Indians dont ….anyway….lets do something start by feedint a cup of rice to people who dont even have it…..

  2. Hi Alka,
    First time here and i very much agree with ur points here.
    Even there only a handful of ppl who worry about this inflation i guess.
    As one person here said,there r more educated illiterates here.they r happy as long as they get their salaries and eat meals.If Govt. says no to imported foods,one section will go hyper and if they stop exporting,another will get abused.And regarding demand and supply,even in many villages farming is not taken seriously,esp in my state.I can see all of them sold out as residential plots.Govt. should take census of the agricultural farms exclusively and take necessary steps to provide solutions to farmer’s woes.And i totally agree with kitchen gardens,atleast the necessary ones and easily grown ones,we should not rely on these retailers.

  3. Good post. I must say you are very thoughtful. I like the No.4 point and totally agree with you on this. We stay in gurgaon and 70% of people here have lot opf money because of which they don’t think once before spending and sellers charge money as per their wish.

  4. I forgot to add that I’v already boycotted the imported fruits that we get in the malls. I’d rather eat Pune papaya than Washington apples. Huh.

  5. The article is put up really well and I share the same thoughts as you. I dont go buying veggies myself but my maid does it. In a family of two we spend around 100 bucks every week only for vegetables. All other groceries cost around 5K per month. That is too much for a family of two.
    I agree with Basantlal unlce that IT people are kind of OK to pay such prices as they get fat pay packets. I am from IT (but not with a fat pay packet 🙁 ). Our problem is that we want things readymade as we dont have time to cook food ourselves. We are so busy slogging in our cubicles that we really dont bother or dont have the time to look at important things like price hikes.
    However, the problem of price rise has really crossed its limit. Though we all know that the politicians and the middle men are to be blamed for it (Coz it is these people who hoard food in dock yards to inflate prices) we cant really do much about it. We might just remove one bunch of corrupt people to bring in new ones at their places.
    I agree with Deepak that its time we, the mango people, did something about it. We definitely can grow small time seasonal vegetables in our terrace or backyard gardens. Even small pods of garlic and corainder in tubs/pots is a good start. We really dont need to decorate out homes with plants. We’d rather be growing our own food in them.
    Well, I am in for this. I’m gonna grow my own veggies as much as I can. N if everyone of us does the same, its definitely gonna make some sort of a difference. We need to be together and make it bigger. Come on guyz lets do it. People power is the biggest power.

  6. Very well thought out article.This is something that has been on my mind too….esp after I bought a measly looking bunch of corriander for 13 Rs last week.

  7. I am not a good cook, but wife is 🙂
    May be I understand economics a bit.
    While I was in college I learned
    “India is Rich, backed by Poor Indians”

    To elaborate it
    “India is full of natural resources, but majority of people here are illiterate or educated illiterate”. They have degrees but no passion to apply knowledge to real problems. We are good at blame game. Politicians blame public and public blames government and politicians.

    Very few think what can I do for this problem.
    Well !!!
    Have you ever thought why China and India can see the growth at 8 to 10% but countries like UK, USA still have low growth rate. May be because they are already developed and scope of further improvement is very less.

    Where there is problem, there is an opportunity. Thats like business minded. People take perfect advantage of this statement in negative sense.

    Prices don’t rise in rural places, because people give up very soon. People who live in urban places are ready to stretch and say “You can’t stop eating”. Thats exactly what these traders know. You wont stop eating if prices increase and they take advantage of you.

    Of course the ideas of kitchen garden, farmers market are very nice.

    Now a days malls offer you better prices on Wednesday. Can you share your experiences?
    I get hypercity SMS for cheap groceries on Wednesdays.

    Can we figure out some list of alternate recipes where prices are more stable? Where we can acquire more quantity when these food items are cheap & long perishable ?

    Can we send the message to these traders that if you increase the price we will stop buying, so better keep the prices stable. I know this kind of movement requires great unity, but at some point this needs to be initiated.

    Are you with us ???

  8. Alka, I have been out of the Indian scene for a long time to meaningfully talk about prices.

    This is what I heard on the radio when they were talking about poverty and multinational food companies. The problem in India was not that there was not enough food to feed all the people but distribution. So a few years ago tonnes of wheat was dumped into the ocean to keep the prices artificially up.

    On my last visit I was shocked to see apples and oranges shipped in from Australia and New Zealand selling for affordable prices, and the Indian variety ones I was used to in my childhood nowhere to be seen.

  9. Basantlal Nagdev says:

    Mentally we should learn to avoid food thats not in season. In India middleman is the main culprit. Even if a particular item is in short supply by say 20%, the price rise is more than 40%?. Avoid them and use food which is cheaper or use them sparingly. Politicians, less said about them it will be better?
    How many of us grow vegetables in our gardens/terrace? Hardly anyone.
    Many big cities hiring IT professionals get handsome pays to carry home and here you will find PIZZA reaching faster than ambulance or police.
    God bless our India

  10. Wow, Alka, you think the same way I do. I guess the politicians are not bothered about the people they just think about themselves and as long as they get food on their table they dont care!
    I couldn’t believe the vegetable vendor telling me that french beans were for Rs. 100/- a kilo. French beans at 100/-,jeez.

  11. Really u r gud cook and gud writer also. I think corruption to be main point as India has lots of resources but its not reached to people ,people in the middle could be say any politicans etc does not let it reach in proper hands,so our country is not able to progress the way it should be.

  12. by house wives only

  13. Hi there alka ,didn’t I say u should be a writer or media person
    u do analise the ishue very well .only solution I can see DHARNA at sonya gandhi’sdoor

  14. Nice article Alka ,

    I have no clue about vegetable prices these days , but does sound expensive. Any ho , now i know what the prices are !

    So the question is do we start a Kitchen Garden for ourselves to counter this price hike ?

    In fact there is a thread thats goining on about kitchen gardens on GourmetIndia.com , http://www.gourmetindia.com/topic/1004-my-kitchen-garden/

    May be we should also start looking at beating the price by growing at home!

    Cheers

    Chetan

  15. Nice writing… It hurts hell to the bottom of heart, that prices are like fire. Its not because of so called reasons, but because of Globalization with Commodity Markets.
    They chase prices at international level, ir-respective of quality. Govt is happier because of High Tax they get, Domestic brokers earn good, while FII gets huge profits( they never bother what is inside jute bag).
    Its common man, whom the problem has to suffer.

    Yes, as you pointed, to meet this eating grid, we must increase cultivation at domestic level, rather then importing sub-standard, rather preserved GM goods. And we are competing just in prices with international standards, leave alone anything else to count!

    Solution:
    Ahh, this is what, everyone wanna know, but all solutions are at higher level, govt and corporate level. We cant stop eating food.

  16. Hi,

    Thoughtful writing.
    Additional point:
    Lot of food is exported.

  17. Hi
    Very thoughtful writing. You have really studied about the fact and I feel You are really concerned about the problem. I do agree with all the points and I think 4th point is very much proper.
    7th one on corruption, there is no solution for this till every common man stands against it.
    FYI:
    In a small town like Hubli, we get coriander leaves for Rs.20, Rs.60/kg for tomatoes and do not ask for fruits!!!
    Well written!
    Keep up the work.

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