ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Whither India's Food Policy?

Government intervention in foodgrain markets meant primarily for promoting food security has reached a stage where consumers are being deprived of basic food, when a large proportion of the output is diverted from the market to government warehouses. High prices for grains paid to producers, completely ignoring demand-side factors and costs involved in building and holding grain stocks have put them outside the reach of consumers. Stocks are being liquidated by releasing them to private trade for export at a heavy discount. This implies a sort of taxation for domestic consumers and provides a perverse incentive for private trade to withdraw from the primary market.

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