Inflation? Blame it on pay commission

Even as the inflation figures touched all time high in seven years, experts suggest while most of it is due to the global trends, some of the problems are the making of the present government."I know about the international market but the Government is also to be blamed for certain lapses," said Biswajit Dhar, Head for WTO Studies at the Indian Institute of Foreign Trade, New Delhi.

In an interview with Commodity Online, he said, "It could sound too simplistic, but you cannot run away from reality. The government’s speculative comments that it will implement 6th Pay Commission Report for central government employees have largely contributed to the unprecedented spurt in inflation graph".

Dhar argued that these are some facts the text book economists will not endorse but the fact of the matter is on the contrary. "Such speculative factors leave worse impact. The day you announced about Pay Commission, my house maid started raising her salary and so," he remarked.

He said statistics suggests that ever since the announcement was made, the Government has totally lost control on "its mechanism to control inflation". "All measures and warning taken since then despite cooperation from steel, cement and other industries has not helped," he maintained.

Dhar diagnoses that the "political will" is must to handle difficult economic situations. "Someone will have to bell the cat….. these guys (politicians) seemed to have not learned anything from the past," he said adding even in the past politicians of all class have resorted to "populism" vis-à-vis managing country’s economy. He maintained that time has come to take a stand where the priorities of farming community is well defined and safe guarded at one end while at the other end even the consumers should not end up coughing up more.

"Even in Delhi’s wholesale markets like Azadpur and Okhla the prices of essential commodities have not gone up so high. But the scenario is different when it comes to my colony at Chittaranjan Park. That means some one else is making money even as consumers end up paying by the nose," he said.

He said at the government level some steps have been taken. "The APMC Act is one such step, I should say," he observed adding clause like 14 wherein it lays down the rule that, "there will be no compulsion on the growers to sell their produce through existing markets administered by the Agricultural Produce Market Committee (APMC). However, agriculturist who does not bring his produce to the market area for sale will not be eligible for election to the APMC," – is pretty good.