Veggie Prices Zoom As Govt. Refuses To Act

Intoxicated by praise from Moody’s and the World Bank, Narendra Modi’s govt. has perhaps forgotten how common Indians are faring. Stuck in a job-loss economy, the people have been blindsided by zooming retail prices of common vegetables consumed across the country on a daily basis.

Finance Minister Arun Jaitley, however, was not worried. When asked about prices in late September he told media that it is “normal for vegetable prices to rise during monsoon”. The rainy season is gone but prices are refusing to back down.

Prices of many common vegetables like onions, tomatoes, brinjal or eggplant, cabbage, cauliflower, various greens, beans, etc., have increased by anything between 50% to 100% since January this year, according to retail prices data collected by the govt.’s Labour Bureau. In some cases the price spike is incredible and cannot be explained by some snags in the supply chain. For instance, tomato prices have shot up by a jaw dropping 157%, cauliflower by 108%, onion by 94%, peas by 218% and leafy vegetables by over 60% in the past 9 months.

In general, the Labour Bureau’s index for fruits and vegetables has increased by over 37% in this period driving up food inflation. For poorer people – that means for most Indians – this is a major blow to family budgets already under pressure from steadily rising prices all round. With joblessness continuing to grow as recent data has revealed economic distress under the double strike of job insecurity and runaway food inflation is becoming unbearable.

Usually, the govt. of the day explains away price spikes in single commodities, especially vegetables, as resulting from unseasonal rains or storms, or dip in production in some regions. But an across the board price spike of the kind being witnessed in recent weeks is unprecedented and highly damaging.

Vegetable inflation has led to increasing prices of some other commodities like eggs, as consumers shift to equivalent food items. For instance, eggs are now selling at about Rs.7 each, up 40% in the past two months, making them as costly as dressed chicken itself.

One of the biggest failures of the Modi govt. has been on the price front. Since June 2014, several essential commodities have seen a steady rise: meat is up by about 20%, milk (17%), onions (47%), radish (37%), carrots (45%), greens (32%), tomatoes (88%), brinjal (43%), cauliflower (37%), peas (69%), beans (24%), according to . This is apart from periodic price spikes in specific commodities like onions, pulses or eggs, that arise from a combination of temporary supply side constraint being used and magnified by unscrupulous traders and hoarders who often function as cartels.

The Modi govt. has floundered around in dealing with this and, as the case of pulses shows, not been very successful in preventing steady or spiky rises. Despite a bumper crop of pulses in 2016-17, prices continue to be high in absolute terms, which is what matters to most Indians.

Recently, several trade unions have called for a country-wide protest day against price rise on Dec 13, 2017. This comes in the backdrop of a historic protest by workers – the 3-day Mahapadav - at Delhi to press for better wages and control of unbridled price rise, among other issues.