OPED | Friday, August 14, 2009 | Email | Print |  | Back
Tough times for UPA
Kalyani Shankar
The Government finds itself confronted by a looming drought across the country, galloping rise in prices of essential commodities and, to top it all, a deadly swine flu pandemic. The Congress may be trying to put up a brave face, but it knows that there are no easy solutions to any of these problems
The Congress has identified three issues — drought, price rise and swine flu — for the UPA Government to tackle in the next few months. The party is aware that Assembly elections in Maharashtra, Haryana, Jharkhand and Arunachal Pradesh are round the corner and the Opposition can take advantage by making these poll issues. Ironically, the party is also trying to distance itself from the Government, expecting it to handle these issues on a war-footing.
When the UPA began its second term, the Congress was upbeat after a creditable victory in the Lok Sabha election. Riding to power on the slogan of ‘aam admi’ , the party and the Government are now in a quandary as how to deal with price rise and drought which directly affect the common man. Adding to the Government’s woes is the recent observation of the Supreme Court which has described the situation as “terrible” and wanted the Government to tackle it effectively. While the wholesale price index remains negative, prices of essential commodities have shot up in the past few months. The Reserve Bank of India, while updating the monetary policy for the fiscal year, has warned that the inflation could even slip further due to lower monsoon.
Rising prices of food items dominated the just concluded Parliament session when the Opposition gheraoed the Government over the issue. The proverbial ‘dal, roti’ is no more within the reach of the common man as prices of pulse, sugar and other commodities and vegetables are touching sky. No Government can afford to ignore this situation.
The Government should not only think of short-term measures to contain price rise but also chalk out a long-term strategy. In spite of high gross domestic product growth, the production of essential commodities have not gone up. Pulses and sugarcane have showed severe shortage of supply. The production of vegetable oil and paddy are also causing concern.
What should the Government do? First of all, If only the Government had begun importing food grains in June itself when it was known that there could be a gap, things would not have been so bad. Now the international prices have also gone up and the country will have to shell out more for importing food grains. Measures like a selective ban has already been imposed on exports and future trading on food grains. Besides that, permitting import of lentils and sugar by state-run firms at zero import duty may ease the situation.
Second, the Government should use its stick to punish the unscrupulous hoarders. Third, market intervention where necessary could help. Fourth, the public distribution system should be strengthened and proper channelised to better help the poor.
Drought is the next worrisome issue. A total of 141 districts has already been declared drought-affected. Official figures reveal that a deficit of more than six million hectares had been reported in paddy cultivation. The kharif crop cannot be salvaged on account of the failure of the monsoon but the Government can concentrate on the rabi season. An assessment by the Morgan Stanley shows that 48 per cent of the cropped area has already been hit by the deficit in rain.
Although Finance Minister Pranab Mukherjee has said that “there is no point in pressing the panic button,” panic has already spread. Putting on a brave face, Mr Mukherjee is optimistic about the RBI’s figure of six per cent economic growth rate.
The Government is slowly gearing up to face the challenge by offering subsidised diesel and additional power to farmers, yet much more needs to be done. Farmers need smooth loans. The contingency plans for crops, drinking water, human and animal health and fodder should be launched immediately. Alongside, long-term measures to increase the production of pulses and oil seeds should also be taken. In addition to the buffer stock, the Government will do well to deal with the needs of small and marginal farmers.
While Prime Minister Manmohan Singh has assured that there is enough cushion on account of bumper food grain production in the last two years, he has also cautioned that the reduced kharif crop may have an inflationary impact on prices of many commodities.
Swine flu is going to be the third chronic problem for the UPA Government. Already 18 deaths have been reported in the country and the panic is spreading fast with the media blowing it up. The Government has to ensure that there is no panic and that the country is fully prepared not to let this menace go out of control.
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