This refers to “Why food is costlier” by T N Ninan (January 8). Mr Ninan has come out with quite a different view on food inflation. Nobody has talked about agriculture and trade reforms, though there have been several other viewpoints on food inflation. All this while, the central government (read finance ministry) has been looking to the Reserve Bank of India (RBI) to take initiatives to curb inflation. The RBI has now exhausted all monetary instruments (read interest rates and reserves). Surprisingly, however, the apex bank is reluctant to apprise the government of its inability to control inflation.
It is now up to the government to act, with supply-side inefficiencies playing havoc with the distribution system. Why isn’t anyone talking about the opportunities available to the government to tackle food inflation through budgetary prescriptions? Mr Ninan wants the prime minister to act fast. But the PM is unable to control the political phenomenon of opposition to agriculture and trade reforms. So our economy can rightly be called a political economy, though there is no dearth of knowledge that covers the price points.
K V Rao, Bangalore
