The accompaniment of one or two green chili peppers, the price of which recently soared to over Rs. 100 per kilo, a small portion of smashed potato nicely masticated with a tinge of salt and a few drops of unrefined mustard oil, with the steamed rice at lunch and dinner is considered a luxury. The price of this variety of toxic mustard oil in the retail market is Rs. 70-80 per litre.

Last week, a few of their literate leaders carried a piece of bad news – the prices of grains are going to be further dearer in the coming months. The news had spread like wild fire at tribal settlements known as Jungle Mahal. The tribal populace are peeved and agitated. The news is not entirely without truth. The government has decided to impose a 70 per cent import duty on milled and semi-milled varieties of rice, a staple food of millions of poor households, especially those living in the eastern and southern parts of the country. In the face of an uneasy food inflation, the government allowed duty-free import of rice, two years ago. The prices of major foodgrains – both rice and wheat – continue to be uncomfortably high.

The return of the import duty, that too at 70 per cent at one stroke – is bound to make the common man’s rice dearer. It is feared that Maoists at Jungle Mahal may turn more violent if the open market rice becomes more expensive. Most of these poor Adivasis have no ration card. Not that they ever cared for one. Despite their living in abject poverty, most of the tribesmen and women are kept out of the BPL list. The reason is more political than economic. The distribution of BPL cards has been part of a political racket in this region and used as a tool to muster voters by ruling parties during election time. The supply of rice to those living below the poverty line (BPL) is highly subsidized. Therefore, it is also rationed. The quantity of rice per adult and child distributed to the poor through ration shops every week is hardly enough to beat the hunger. The rice quality is often so poor that it is hardly edible.

The zero-duty rice import in the last two years has served as a disincentive to local market speculators and rice smugglers who have long been using the commodity for lucrative illegal barter trade with neighbouring Bangladesh and Nepal. Smuggling causes domestic scarcity and high prices. It helps the trade both ways. And, the common man pays the price. These rice smugglers are waiting for the revised government import tariff notification to resume the illicit cross-border trade with renewed vigor. Apparently, the logic behind the government decision is a sudden fall in the price of the commodity in the global market due to good crop forecast and large arrivals. In India, the new rice crop, largely produced during the rain-fed kharif season, is yet to arrive in the market in most parts of the country’s rice growing regions due to delayed monsoon this year.

The mid-year import tariff hike decision may have more to do with the government’s indirect-tax revenue shortfall concern than the need for providing price protection to local rice growers against cheaper import by the trade. Frankly, even without the import duty, any imported rice, this year, will cost much more because of the sharp fall in the exchange value of Rupee vis-a-vis US$ and other hard currencies. One could still appreciate the government decision if it were influenced entirely by India’s dwindling foreign exchange reserves in the face of growing imports of foods, fuel and fertilizers. However, it is not the case. The government has opened a floodgate of gold and luxury imports, including wasteful entertainments such as ‘Formula 1’ Grand Prix Racing, IPL Cricket and highly expensive western music, song and dance extravaganza, causing a reckless outage of hard earned foreign exchange.

While the administration is against any further extension to the duty-free rice import facility that benefits the poor, the super-rich, who constitute less than five per cent of the population, is living a princely life and enjoying to its brim with such exclusive imported entertainment options as Formula 1 car racing, Lady Gaga Raga, maddening Metallica, DJs, VJs and sexy cheer girls and brought at their door steps with the indulgence of the national government. The Jaypee group spent some $ 200 million (Rs. 1,000 crore) to build the racing track complex at Noida, near Delhi. The cheapest ticket for the maiden event was $50 (Rs. 2,500) and the most expensive one was $ 200,000 (Rs. 1 crore). The entire grand stand was sold out. The Rs. 40,000-ticket per head for the post-F1 Lady Gaga concert, the pop diva who popularized the short dress, too was entirely sold out. Electronics software city Bangalore went crazy for the singing-swinging Metallica show entry tickets of which were up for grab in the grey market at 20 times the printed prices. All these local soft currency transactions serve a hard blow on the country’s foreign exchange reserves when they get repatriated in hard currencies to overseas agents, performers and equipment suppliers.

The ever indulgent government would go to any extent to whet the appetite for luxuries of the rich. It cleared the import of 685 tons of gold for jewelry alone in 2010, the highest by any country in the world, when many local flour mills struggled to import wheat in the face of the domestic shortfall in the availability of the most sought after foodgrain, especially in central and northern parts of the country. Lately, India has also emerged as the world’s largest bullion buyer. The country’s annual demand for gold bars from the rich has been rising by almost 20 per cent. While much is talked about the food subsidy for the underprivileged, the government presently sells less than 20 million tons of rice at subsidized prices to only 65 million poor families in the country.

Government statisticians have forecast the current year’s rice production at 102 million tons as against 95.32 million tons last year. The area under paddy cultivation, they say, have increased by six per cent to 26.03 million hectares, this year. The government has recently raised the minimum support price for the common variety of rice by 16 per cent to Rs. 1,080 per quintal or Rs. 10.80 per kilo. The open market retail price, however, varies between Rs. 25 and Rs. 40 per kilo. According to the food and agriculture organization (FAO) of the United Nations, favourable growing conditions and attractive prices have led to the prospect of a record global rice production this year at 480.5 million tons of the milled variety. These forecasts armed the government to revert to the import duty regime for the common man’s rice.

High prices of foodgrains and other daily necessities along with multiplying medicine and medicare costs, including fees of physicians and surgeons, are driving the poor and the low income group crazy. A sense of deep frustration and dejection is fast creeping in, increasingly driving the poor to violence as a means of expressing their anger against the corrupt and insensitive administration, squeezing the poor at every opportunity to benefit the rich. The poor is getting increasingly restive and alienated towards the administration strengthening the hands of the radical groups to wage a bitter class war in and around highly impoverished regions. Unfortunately, the power-blind government is unable see the danger. (IPA Service)