After winning the Prime Minister’s post of the world’s largest democracy by upstaging ruthless veteran Congress politicians, Narendra Modi must now go to battle against the humble onion. In India, the common man measures food inflation by how much onions cost, because it is the one vegetable that the country cannot cook without. So to keep his promises of deliverance from inflation and of growth, Mister Narendra Modi has to first tackle the onion’s skyrocketing asking price.
Even nature seems to be against him. India is set to record one of its weakest monsoon seasons in recent months owing to the El Nino Effect. If the warm Pacific waters do decide to intervene with the Southwest monsoon, then crops around the country will fail, and Mr Modi may find himself lining up against other vegetables too, like potatoes and egg plants. There is some good news, though: if reports are to be believed, there is no shortage of staples such as rice and pulses in the country’s granaries, so even in the worst case scenario, the people of India won’t starve.
But that will hold true only if the hoarders keep away. If you ever have the opportunity to be a businessman in India, make sure you choose to be a food trader with a bunch of warehouses under you. Then you can buy up all the vegetables you want, keep them hidden under lock and key, and wait for the price to go up, as it must. In short, you soak up the supply and enter the market at your price. So far such traders have made a killing on onions, and though the government is trying to curb this practice, the traders argue that their tactics are justified under free market economics after all. (Literally everything can be defended as a ‘free market’. We know that already, don’t we?).
So if these hoarders extend their ‘operations’ into the staples market, who’s to say the same price rise currently seen in vegetables won’t happen in grains and pulses? To make a sticky situation intolerable, these traders are often in cahoots with state governments, because after all, wherever there is profit to be made, a politician can be found.
The Wholesale Price Index, meanwhile, has crept up to 6.02. Mr Modi must be wishing that inflation were as easy to tackle as the Congress Party. Alas it isn’t.