ISSN (Online) - 2349-8846

Sthanu R NairSubscribe to RSS - Sthanu R Nair

Price Monitoring and Control under GST

The Central Goods and Services Tax Act, 2017 has an “anti-profiteering” clause aimed at ensuring that businesses pass on tax rate cuts and cost savings resulting from the adoption of GST to the consumers. In this context, Australia’s experience with price monitoring and control during the GST transition period is looked at to draw lessons for India. It is eminently possible to institute a comprehensive and effective price monitoring and control mechanism in India to enable benefits to consumers under the GST regime. However, the anti-profiteering rules in their present form have some lacunae and may not produce the desired results of containing profits and, thereby, price rise.

Agrarian Performance and Food Price Inflation in India

Examining long-term trends in food inflation in India in relation to the performance of the Indian agricultural sector under various agrarian policy regimes, this paper shows that despite the slowdown in the agricultural sector and higher increases in the cost of food production during the post-economic reforms period (1992-2013), food prices were relatively low compared to the initial (1967-80) and the maturing (1980-92) stages of the Green Revolution. This, it is argued, is possibly due to more stable agricultural growth post 1991-92, higher buffer food stocks, greater coverage of the public distribution system, and better responses to food price fluctuations due to import/trade liberalisation and a more comfortable foreign exchange reserves position.

Making Sense of Persistently High Inflation in India

The rising prices of two product groups - primary articles and fuel - have been responsible for the build-up in headline inflation between December 2009 and August 2013. The most worrisome aspect is the high inflation in a majority of food articles in the last six years or so despite a favourable domestic food supply situation and low global food prices. Based on the analysis of the food expenditure pattern during 2004-12, this article points out that rising domestic demand pressures have contributed to a surge in the prices of six high-value food commodities - pulses, milk, egg, fish, meat and edible oil. Another possible reason for stubborn food prices is the rising cost of production of food commodities.

Food Price Inflation in India (2008 to 2010)

This paper analyses the causes of the high inflation experienced in 12 food commodities between January 2008 and July 2010. It is shown that a majority of the commodities were subject to inflationary pressures due to domestic supply-side constraints. They include pulses, fruits, vegetables, meat, fish, spices, tea, coffee and sugar. Cost escalation was the primary reason for rising prices of milk and eggs. The high inflation of rice was caused by a complex interplay of factors. With the exception of milk, the paper finds no concrete evidence to support the popular view that the higher food prices in recent years was the outcome of a "secular shift" in food consumption patterns towards high-value agriculture products. Developments in the global economy have influenced the domestic food prices mainly through passing on world oil price increases. High cost food imports played only a very limited role.

Wheat Price Inflation in Recent Times: Causes, Lessons and New Perspectives

In this paper we demonstrate that the high level of wheat procurement during 2008-09 and 2009-10 at a higher minimum support price was necessitated by the difficult circumstances that the government faced, characterised by a precarious buffer stock position from 2005 to 2008. Hence, blaming larger procurement and a higher msp alone for the soaring wheat prices between 2008 and 2010 is an oversimplification of the problem. The experience with wheat procurement in the recent past suggests that foodgrain procurement at a lower msp may not always be feasible. Finally, it is shown that the inability of the government to utilise the abundant wheat stocks for the benefit of the consumers during the recent phase of high foodgrain prices was due to the poor offtake of the grain allotted to the states, not to the operations of private trade via the government's open market sales window.

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