Food Inflation Has Dogged Modi Government Since 2015

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Food Inflation Has Dogged Modi Government Since 2015

This is not a new problem. Narendra Modi’s first year after the 2014 election was marred by the Dal scam, which resulted in prices of legumes touching Rs 200/kg. Now let’s look at February 2024, food inflation touched 8.66% due to costlier vegetables. 

This piece was first published on The India Cable – a premium newsletter from The Wire & Galileo Ideas – and has been republished here. To subscribe to The India Cable, click here.

Ghar ka kharcha nahi ho pa raha hai,” has become a common refrain during the election season. Meanwhile, food inflation doesn’t seem to go down, and making ends meet in India is definitely getting harder for millions of Indians. When we look at the latest wholesale price index, it’s sailing at a high. Food inflation has been destroying our wallets, yet why is the problem left unaddressed?

This is not a new problem. Narendra Modi’s first year after the 2014 election was marred by the Dal scam, which resulted in prices of legumes touching Rs 200/kg. Now let’s look at February 2024, food inflation touched 8.66% due to costlier vegetables.

January reported an inflation of 30.25% in vegetables, while prices rose by 27.03% in January 2024. After paying over Rs 200/kg for tomatoes, and exorbitant prices for onions, wheat, sugar and other foods, Indians need no reminding that food policy was the nadir of our “double-engine Sarkar”.

The more surprising fact is all these inflationary spikes come with multiple export bans from wheat, rice to sugar, and bad harvests. And while independent international reports were pointing to hunger growing in India, the Modi government responded with ad hominem attacks and other misinformation. But in action the government tacitly agreed with the reports, hence it decided to ban exports of wheat, rice and sugar, triggering a major food security threat on the world.

In India, too, as the 2024 elections were coming closer, after removing additional food rations from the National Food Security Act towards the end of 2022, the government was forced to galvanise the programme and continue to feed “800 millions Indians”. NITI Aayog in its 2023 report said that 74.1% Indians struggle to afford healthy food. The UN agrees with these figures.

No wonder the prices of wheat in 2013 July were Rs 16.10 per kg and April 2024 wheat market price is Rs 23.65 per kg. In fact, wheat prices have been at an all-time high for a couple of years now. High fertiliser prices, the Ukraine-Russia conflict and erratic weather have added to the government’s woes, but nevertheless, good policy decisions could have stabilised prices without the citizenry suffering.

A good example of a missing policy decision is the government’s close fitted approach to wheat procurement from farmers. Last year, our government decided to procure only about 25 lakh million tonnes (MT) versus 34 lakh MT in 2022. This came at a time when Indian strategic food reserves were at their lowest.

Other kitchen essentials like milk, too, reported a 15% hike in retail price last year. Then there is edible oil inflation too. Prices in 2021 jumped from Rs 80 to Rs 180. Vegetables, especially tomatoes, becoming more expensive than petrol added to common Indian life worries. Onion prices have also been very volatile due to climate disruptions and bad policy decisions. The picture becomes clearer when we compare wholesale price in the Nashik mandi in 2014 February reported to be Rs 4.5 per kg, and on 16 April 2024 had jumped to Rs 13.8 per kg.

Consider mangoes, the fruit of choice for all Indians in the summer. As per a report, “the price index value of mango increased by about 116% from the base year of 2012” until 2023.

The report pegs the price at Rs 96 for fiscal year 2013 versus Rs 216.1 in FY 2023. ‘Aam’, which also means ‘common’, is another good example of inflationary pressure on staples. Apples prices have also been unstable due to various factors like erratic weather. But the secondary factor has been protests against corporate control of the apple markets. Apple farmers have organised protests against Adani stores and even outside state government buildings to break corporate cartelisation in Himachal Pradesh.

Now what does all this mean for Indians? More hunger and more malnourishment due to high food inflation. The high inflationary spikes are already shrinking the size of our thali. Meanwhile, farmers are facing challenges as they aren’t getting a fair share of the pie either. The revived farmers’ movement is also symbolically representative of the larger need of rural India to get a fair price for produce.

The spikes primarily benefit the big traders, stockers and agri-processors. The consumers, taxpayers, farmers and small traders are all in the same boat taking the inflationary hit.

In conclusion, food inflation rises again and again above the national and global average, yet after being in power for a decade, the Modi government has failed to control it.

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