THE GDP DISTORTION IN INDIAN ECONOMY-WRONG PRIORITIES OF GOI!

Over obsession of Indian Government (GOI) with food grains is reflected by the enormous investments made in procurement of these staple foods at state determined prices and supplying the same to millions of people at heavily subsidized prices involving almost 80000 crore rupees expenditure to the exchequer annually. Another anachronism is in forcing the sugar industry to part with a portion of its output at a loss, to the government for supply to the low income group of population under the much criticized Public Distribution System (PDS), which has been able to sustain the "looters and criminals" who indulge in siphoning of the commodities meant for the poor! It must be admitted that for a communist or socially biased country ensuring survival of the citizens is the priority but a moot question is whether leading low quality life is what a citizen desires. Though it is known that cereals (note pulses are not even considered) and sugar do provide the required calories and to some extent proteins, if consumed in sufficient quantities, it is the protective foods like fruits and vegetables which can ensure good health. Unfortunately GOI even after the economic liberalization policies initiated two decades ago still cannot grasp the significance of the importance of these protective foods which are left to the market forces to "play around" with the result that almost all fruits and vegetables, prices of which are manipulated by the middle men, are not affordable to the so called aam admi!

According to a recent report cereals contribute just 20% of the farm out put while fruits, vegetables and milk accounted for more than 40%. The growth of the Dairy sector is attributed to the single minded devotion and commitment of Dr V Kurien, the architect of the so called white revolution in the country and every Indian ought to be proud of this achievement making the country the top most milk producing nation on this planet. In contrast it is the horticulture front that was neglected for long by both the development scientists and the policy makers. How sad it is to see a country like India which is blessed with a wide range of weather suitable for growing hundreds of fruits and vegetables lags behind in providing the minimum needs of these protective foods at affordable prices! There is practically no stable policy that governs this industry and with low productivity and high market prices GOI is pulled between the desire to export and controlling of domestic prices. Recent Onion fiasco is a classical example of how badly GOI works and its consequences on the well being of its citizens.

While claiming that India is one of the top producers of many fruits and vegetables based on statistics provided by the state administrations, no one knows the ground reality. There is serious apprehension among food scientists that a sizable production is irretrievably lost in the field as well as during post harvest stages though there is no unanimity on this issue, the spoilage figures trotted out ranging from 20% to 50%! Whether such gigantic losses are responsible for price distortions in the market is not known though some observers attribute the same to these losses. On the other hand the miserable conditions under which the growers manage production is scandalous and mostly the beneficiaries are the middle man pre harvest contractors who play the Shylock role through their money clout. To day in the Indian market no fruit sells at a price less than Rs 25 per Kg though the farmers share must be not even 20% of this market realization. How can any one in India, except a few rich,can afford to buy Apple priced at rs 100-150 kg and the old saying that an apple a day keeps doctor away is a hollow one to them because going to a doctor may be cheaper than eating an apple!

Is it not a paradox that while GOI is trying to supply cereals at a ridiculously low price of Rs 1-3 per kg it has no consideration for making fruits and vegetables available at reasonable prices to its citizens? Of course one hears about tall talks about the plans of GOI such as activating the somnabulic National Horticulture Board or launching of a Horticulture Mission but there is nothing to show at the ground level and the prices of almost all horticulture produce continue to climb irrationally with wide fluctuations from day to day! It is really a wonder as to how the rural population in the country is able to have good health by surviving on only leafy vegetables which are the cheapest and some local fruits of no commercial significance. Why NDDB, which was once roped in by GOI during Dr Kurien's rein was not able to make any impact on the horticultural front during the last three decades is not clear though one can surmise that there must have been gross interference from the high flying and arrogant bureaucracy at Delhi. Cooperative organization of horticulture growers, similar to milk cooperatives, should have been ideal for the country because of the extremely small sized land holdings and NDDB may have the answer as to why it has failed. It may be worthwhile to have a re-look at the past experience and re-tool the program accordingly. It is time for GOI to wake up and bring sanity to the horticulture produce markets in the country.

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com