price rise and the BJP

[V K <vk@acet.com>]

[This mail was sent to me. Please send to debate@indiapolicy.  Also I
notice that here we are entering into particular political party
discussions. We might be better off excluding the names of parties and
to use generic names like "some parties" since after all we are writing
the "best policies" document here and it does not matter who is doing
what. Sanjeev]

   It seems that the BJP leadership is finally getting its act together
when it comes to the rhetoric of the price rise by putting the blame
where it squarely belongs--on the policies followed by the parties in
the opposition while they were in power. It is noteworthy that this is
the first poor monsoon season since the inception of economic reforms,
and the reaction of prices to the unfortunate weather proves that,
rather than immunising the country from the vagaries of the weather, the
anti-farmer and anti-people approach of the hitherto followed reform
process has actually put the country even more at the mercy of the rain
gods.

   Look at the various issues involved in the price rise: lack of proper
storage facilities, lack of adequate transportation infrastructure,
policy impediments to free distribution of goods, a restrictive import
regime, lack of irrigation, the lack of a proper food processing
industry, the inordinate power of traders and other intermediaries, etc,
etc, etc. All of these factors have played a role in exacerbating the
effects of the poor monsoon, first by causing the losses in output to be
higher than they should otherwise have been, and then by magnifying the
effects of the output shortage on prices. Yet none of these factors has
sprung up in the last eight months--they have all been an endemic part
of the system for ages, and the situation has only worsened since the
beginning of the Congress/United Front reforms.

   There is no justification, therefore, to blame the BJP, rather it is
the opposition who are to be blamed for following shortsighted and
flawed policies--the only reason that prices behaved well over their
tenures was because the monsoons did exceedingly well for the past many
consecutive years. And this is all the more reason for the BJP to focus
more strongly on its stated objective of reforming the reforms, to make
these more farmer and people friendly, and to ensure that what has
transpired this year is impossible ever again.


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