Letters to the editor
Command economy once again
The road infrastructure projects that have been sanctioned by this government are reminiscent of the command economy syndrome of the 1960s. Old drawbacks persist; either the tendering process is incomplete, or the terms and conditions are unclear, or lengthy litigations and local political interference plague the projects, or there is simply a lack of policy and management co-ordination—all this has stalled projects midway and left them hanging till things are sorted out. This is one reason why private funds have largely shied away from infrastructure projects in general. As the outlays are huge, public money is rendered unproductive and lending banks stare at enormous NPAs. The government thus battles on many fronts: growth retarded by stalled infra, unproductive assets that give no returns, PSU banks with poor balance-sheets, and worse, reduced liquidity to service the economy. By granting one-time financial assistance to stalled projects, the government is addressing only a part of the problem of freeing idling assets. But what about a thorough overhaul of its own outdated relic of professional project management? Seminars will not do.
Feeling the inflation pinch
This refers to the report “WPI inflation remains in -ve zone for eleven months in a row” (FE, October 15). It statistically reveals that the general wholesale prices have continued to fall for the 11th month in a row in September but with a decelerated decline (from 4.95 in August to 4.54). There is further drop in fuel and power inflation, too. As against this, the Consumer Price Inflation (CPI) has risen from 3.74 % to 4.41%, but still well below RBI’s forecast rate of 5.8% for January 2016. However, it is too early to evaluate it properly. Interestingly, food inflation has taken the positive route now. Onions have acquired the top spot with a rise of 113.7% in the month of September (August’s was 65.29%) and pulses too have become more expensive, but with somewhat less intensity. It is a different matter that the prices of onion have now reportedly come down to R30 a kg at the Lasalgaon wholesale onion market in Maharashtra. But it is still a long journey ahead for the consumers before they can think of wiping out their tears. Tur dal, among the many pulses, has faced the maximum brunt of the so-called ‘shortage’ of domestic production. Its price seems quite desperate to score a double-century in the retail markets! Of course, others too are also in the race to catch up with it soon. However, one does not know for sure whether the same old story of onions is being repeated in the case of pulses also. In any case, instead of getting involved in the ‘complexities’ of the official data of the WPI and CPI and also developing a feeling of some contentment with the latest government announcement regarding various steps to deal with shortage of pulses in the country, one has to actually walk in the shoes of a hapless consumer to feel the pinch. Such data could always come handy for the government to claim that all is well on the price front. But please ask any inflation-bitten house-wife, and get real about inflation.
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