Tuesday, January 19, 2010

Rising Food Price in India Defies Logic

It is very surprising to see that the food price in India is increasing and in December, the condition was very bad. Indian economy is still not totally out of the impact of -global economic recession and before the recession started, I remember very clearly that the price of food item in India rose very sharply. That time perhaps there was a reason that there was strong demand in the market and Indian economy was also growing rapidly. However, I can not think of any logical reason that why price of food items should increase at a time like this.
We have not heard any news of India getting back its high economy or GDP growth. Secondly we have not heard of any strong demand in the market for food items. Still, many businessmen are getting engaged speculative trade and they are thinking that may be the demand will be increased and the price will be increased in future a lot and that is why the price at this moment is increasing.
Indian government is trying its best to fight against this kind of the problem and I think that it should work closely with the trade bodies to ensure that the price does not go out of control. Well, in 2009, there was a bad monsoon rain and agriculture production wad badly hit. This can be one important factor but still, at a time when Indian economy is still suffering from the impact of recession, I don’t see any logical reason for such an abnormal increase. 

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