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Sunday, September 30, 2012

Info Post

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We knew the government’s decision to allow 51 percent Foreign Direct Investment (FDI) in its $450 billion retail market would cause uproar. When the Cabinet passed the resolution last year, Parliament was paralysed for days. The Left and the BJP united, and then-Congress ally Trinamool Congress as well as the DMK protested. Several states were furious.
When the decision was made earlier this month, sure enough, the Confederation of All India Traders, supported by the BJP among others, decided to call a Bharat Bandh on September 20. Assocham estimated that the bandh caused a loss of Rs, 10,000 crore, while CII said the economy placed it at Rs 12,500 crore.
With even the Samajwadi Party, which supports the UPA from outside, protesting against the FDI reform, Prime Minister Manmohan Singh decided to address the nation the next day. Again, he gently reminded us, as he is wont to, about the role he played in rejuvenating the economy in 1991. And again, a quotable quote emerged from his speech: “Money doesn’t grow on trees.”
The irony of the Prime Minister’s intended epigram is apparent to everyone who reads the news – over the last couple of years, the newspaper front pages have been devoted to the scams the UPA government has been involved in.
To be honest, I think the FDI decision will help both consumers and the economy. We’ll have access to original products (hopefully before their expiry date), at reasonable rates. The economy will benefit from much-needed foreign capital, and ease in supply bottlenecks. If handled properly, the move may check inflation. Whether small traders and family-owned business survive will depend on how enterprising they are – global giants like Wal-Mart, Tesco, and Carrefour won’t be open at odd hours or offer home delivery, for instance.
What I find rather pathetic is the government’s emphasis on how allowing international investors into the retail sector will check wastage of food and improve its quality. Because essentially, this is a confession that our government can’t ensure that the food distribution channels aren’t clogged.
Worse, it doesn’t seem to embarrass the government that thousands of tonnes of grain have been lost to rot, at the storehouses of the state-run Food Corp of India (FCI).
On Wednesday, the reply to an application under the Right To Information Act by activist Tajinder Pal Singh Bagga revealed that about 36,000 tonnes of grain had gone bad under FCI storage since 2008. An earlier application filed by Dev Ashish Bhattacharya had shown that 183,000 tonnes of wheat, 633,000 tonnes of rice and 111,000 tonnes of maize were damaged at FCI warehouses in the 1997-2007 decade. That’s about a million tonnes of grain lost over ten years.
And all of it could have been prevented. FCI blamed the damage on pest attack, leakage, low-quality stock, spillage during transport, exposure to rain, and negligence. When our economy is still largely driven by agriculture, why don’t we have storage facilities that can withstand even floods?
FCI’s website says the storage capacity of the agency is 33.6 million tonnes, as of April 1 this year. The plan is for this to be expanded by 8 million tonnes over 18 months. The grain production for 2011-12 was estimated at 257.44 million tonnes by the Press Information Bureau of the government. The Bureau proudly announced that in the Kharif season alone, the grain production could reach 117.18 million tonnes, “higher than the average first estimates of [the] last five years”.
How much of this will be lost to “natural calamities” that we have no protection against, because we haven’t built enough, or strong enough, shelters?
report by IANS said only 2.9 million tonnes of additional storage capacity have been constructed, out of 18.1 million tonnes approved for being built by the central, state and private agencies – less than a fifth.
Strangely, most newspapers made a mention of the report in their inner pages – in a country where malnutrition and deaths from starvation produce horrific statistics every year.
While the FDI issue has given the UPA’s opponents an opportunity to begin canvassing for the 2014 polls well in advance, and a hinge on which to leverage their election manifestos, no political party seems to be organising any form of protest against spoilage due to poor storage.
It may be true that money doesn’t grow on trees. But are we doing anything to protect what does?


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