Page 5 - IACC Newsletter March-April 2014 Issue 03

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From the Secretary General’s Desk
Dear Members,
Inflation, especially food inflation, continues to be a major worry for the present government. It is instructive to get
deeper into the problems to discern the causes. Of course, supply-side management plays an important role in easing
the prices, which have been rising unabatedly for some time. Inflation is something that we should analyze bereft of any
gutty commitment or demagogue to soothe the ruffled up feelings. Understandably, there is no magic wand to tame the
inflation, which is interplay of many factors.
Foremost among them is the supply bottlenecks of the essential commodities. This can be created by artificial barriers in
transportation of goods and of course, by hoarding. The latter is a criminal offence, which has to be eliminated by taking
suitable steps. Amendment to Mandi Act was proposed to allow the farmers to sell their products without the
intermediation of the middle men. But nothing much has been done to implement the proposal, which requires close
cooperation of the state governments. But what needs to be carefully looked into is whether the farmer is getting
adequate price for his produces. It is a fact that his returns have not kept pace with the increase in prices of the inputs
that go into the agricultural production such as fertilizers, pesticides, etc., with the result that he remains under the
perennial threat of indebtedness. A well-calibrated agricultural policy should ensure adequate returns to the farmer and
a reasonable retail price to the consumers. This is possible only by reducing the role of middle men in such operations.
The sooner the government takes a tough stand to rein in the undue advantage accrued to the middle men the better,
since it can have significant impact on the price rise.
The second important factor is the erratic rainfall, which is believed to have a major impact on this year’s crop because
of the inadequate monsoon, as predicted by the meteorological department. Two solutions are possible. One is
contracting immediately import of such items like grains, pulses, etc., to address the possible shortages a few months
from now. Equally significant is switching to a fool proof warehousing system, where the food articles are properly kept
to avoid damages. Off-loading the stored up items frequently and replenishing them with newer stocks is important.
Oil imports have a great strain on the inflation front. Oil prices are raising high in the international arena. Conflicts in the
gulf region can precipitate this into a major crisis. There is no solution to this vexatious problem other than scaling up
the oil exploration and cutting down the costly imports. Present polemics in the hydrocarbon sector on account of the
price fixation is acting as a dampener to exploration. Sooner we fix this problem the better.
I am pleased to announce that our 45
th
Annual General Meeting will be held at the Taj Mahal Palace Hotel, Mumbai on
September 29, 2014. In addition to the AGM, we look forward to your involvement in Post Budget Analysis event to be
held in Chennai & Bangalore, Indo-US Fellowship Night & Indo US Ventures Possibilities in Media & Entertainment in
Kolkata, and Annual Fellowship Night, Indo-US Legal Summit, and Indo-US Economic Summit in New Delhi, among
others. A complete list of our upcoming activities is available in this issue.
I welcome you to read this issue of the Newsletter for information regarding our engagements in the last month,
upcoming events, and important Indo-US trade information and news.
With regards,
Atul Vyas, Acting Secretary General