The Sunday Times Editorial

1st December 1996


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Rotten eggs

With an egg now selling at Rs. 4.25 and likely to go upto Rs. 6 at Christmas, with rice at Rs. 30 and probably rising to Rs. 40 and shell-shocked consumers paying Rs. 305 for gas that is still in short supply, the festive season beginning today might be more a fast than a feast for ordinary people.

The Cost of Living crisis is clearly beyond control, with the Trade Minister being unwilling or unable to do much about it and the recent budget adding insult to injury by avoiding or ignoring the CoL issue.

As former Finance Minister Ronnie de Mel said recently a budget is not a matter of some economic theories about export-led growth and all that, but an instrument through which practical day-to-day issues such as the CoL and unemployment are tackled.

In that context the budget was a failure if not a farce. It provided little relief in terms of the CoL and less by way of direct jobs, at a time when both the CoL and unemployment rates are reaching unbearable and possibly dangerous proportions. While most economists agree that the private sector needs to be the engine of growth, it could be counter-productive for the state to watch or wash its hands and play no role. The Shell Gas controversy has clearly showed the danger in allowing total private monopoly over a public utility service without any monitoring authority of the state. What happened to gas seems to be happening to most other essential commodities with the private trade being allowed to black market or browbeat the consumer while the sick giant, the CWE, is literally talking shop.

In the food sector specially, we need a balanced approach where the state competes powerfully with the private trader. Then only will prices be stabilised and the quality of goods improved. If the CWE and the Trade Ministry cannot do this, it would amount to an admission of bankruptcy or that the government cannot govern in a vital area. Many governments before had ignored the fact that the stomach is more sensitive than the head. If millions of people are uncertain from where next week’s food will come, they are unlikely to respond favourably to anything that the government proposes. If the people feel that the government does not care, they are not likely to support the government on vital issues like the ethnic conflict.

According to a recent report, an official federation of consumer protection bodies has been formed to get a better deal for the people. The problem with these is that they are largely on paper. When traders are told about state newspaper reports that rice is being sold at Rs. 18 they tell the consumers to eat the papers.

Even yesterday morning state radio proclaimed in a lead story that some food security committee had taken emergency measures to reduce the CoL. It said duties on rice and sugar were being reduced or lifted, but the fear is that as usual, the mudalali will swallow the benefits and the Govt. will wallow in helplessness. The food area is perhaps the most vital and we urgently need a wide-powered monitoring authority as provided for even in open economy citadels such as the United States and Britain. The private sector may be the engine of growth but it is not the whole vehicle. Imagine what would happen if we sit only on an engine.

Having started with an egg, we might as well end up with one. It seems that from one extreme of breaking all the eggs to make an omelette, as old Colvin put it, we have now put all our eggs in one basket by allowing unbridled private monopolies in trade. If the government does not act fast Santa’s Christmas bag for the PA might be full of rotten eggs.

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