STATE TAKEOVER OF WHOLESALE WHEAT TRADE

Summary

This illustrated English pamphlet criticizes the Indian government’s takeover of the wholesale wheat trade in April 1973. It argues that food prices are central to India’s general price situation and that even a marginal shortfall in supplies, or disruption in their movement to market, can produce a wider rise in prices. The pamphlet presents the takeover as exceeding the government’s administrative capacity and dislocating existing food markets.

Key points

• Food prices are presented as a key determinant of India’s general price level.
• A marginal food-supply shortfall or disruption in distribution is said to create broader inflationary pressure.
• The government’s wheat takeover is criticized as exceeding its administrative capacity.
• The takeover is said to have dislocated existing food markets.
• The pamphlet states that scarcity extended beyond wheat to coarse foodgrains.
• Gujarat and Maharashtra are identified as deficit states that did not receive sufficient grain from other states.
• The reversal of the takeover policy is welcomed, although the pamphlet says recovery would take time.
• The concluding passage links violations of economic laws to inflation, likening the process to illness in the human body.