This document discusses the negative impacts of inflation and some of its causes. It notes that rising food prices contribute to hunger for millions and cause some groups to lose out while others gain. Inflation is a major concern in India as wages in many sectors do not increase with rising prices. While the government claims higher prices are inevitable due to various factors including supply issues, the document argues the real cause is mismanagement, including failures in agriculture policy and distribution systems. Solutions proposed include reforms to institutions and distribution, penalties for hoarding, addressing climate change and connecting farmers to consumers.

1. Why is inflation bad?

2. “For every percentage increase in food prices, an additional
16 million people are threatened with hunger.”
P. Chidambaram, former Finance Minister.
• According to the World Bank report, rising global food
prices are contributing to high inflation in many countries
• When prices rise, some sections of society gain while
other sections lose

3. Inflation on ground !!
 Inflation has always been a pressing socio-political concern in India
 vast majority of our working people receive incomes that are not
indexed to prices
 The wages of those in unorganized sector is not compensated by
periodical wage and salary hikes based on the consumer price index

4. RESPONSE OF THE GOVERNMENT
 “higher prices were inevitable”
- President of India
 Government claimed that this was the result of three forces, two of
these are completely out of the government's control
1. Cost-push effect
2. Demand-pull effect
3. Supply shocks

5. MISMANAGEMENT BY OBJECTIVE (MBO)
When there is a terrorist attack the government
blames everybody except itself and its security agencies.
When the prices are going through the roof causing untold
misery all around, it blames the rain Gods and it does not
admit the real cause of inflation which is the cumulative effect
of its mistake in ignoring the agricultural sector, its failure to
check profiteering by middlemen.

6. Contd..
 The import that was not
 PDS Fiasco
 The bitter truth of sugar
 Excise duty or an exercise for a common man
 Baffling buffer stock

7. WHAT CAN BE DONE?
• Overhaul institutions like the Indian Council of Agriculture Research
(ICAR), Agriculture Universities and the food distribution systems
• Stringent punishment for Black hoarders
• Address Global Warming and Climate Change
• Conserve every drop of water
• Universal consensus on Genetically Modified food
• connect farmer and the end user

8. Contd..
• Proper enactment of the Rural Employment Guarantee Act
• Special Agricultural Zones (SAZ) in line with Special Economic Zones
(SEZ)
• Control population, in turn to control the future demand
• small and marginal farmers should have equal access to credit, fertilizer,
improved seeds, pesticides, electricity, and water

9. JAI HIND