Click to play videoNew Delhi: India is about to enter a period of high uncertainty in food prices, warned senior member of the Planning Commission Abhijeet Sen. However, he assured that India was coming out of a crisis.
Referring to global food prices, he said, “Food prices have moved in the past 100 years. At each point went it moved up or down people have talked about a permanent change. Nothing is permanent. There are ups and downs, but this is the hugest up I have seen in a long time.”
This was a candid remark from none other than a powerful man who guides many of the economic policies of the UPA Government.
In an exclusive chat with CNN-IBN, Sen doesn't agree that there is a food crisis but confessed the situation may have gone out of hand, and he blames worldwide speculation for a major part of the problem.
“There is concern that equity markets have become uncertain because of a possible recession. There is a certain flow of financial capital into trying to buoy up their own resource base into commodities,” Sen revealed.
Inflation is now threatening to reach new heights and the Government's measures have had little impact on the trend.
Latest inflation rates show only a marginal dip in edible oil but the prices of pulses and cereals are quite high. Even vegetable prices have climbed a steep 10 per cent in the last count. Now India is more vulnerable than ever before to what happens outside.
"We are slow to react to the fact that what is happening in world markets does affect what happens in India. For example, wheat production depends on a great deal on what people think might be the wheat price abroad,” he explained.
The Government is trying to marry its own policies with the measures being taken worldwide to contain inflation. But that has been far from enough. And though Sen doesn't agree, a food shortage is looming large.
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