India has experienced persistent and high food inflation in the recent past. What could be the reasons?

  1. Due to a gradual switchover to the cultivation of commercial crops, the area under the cultivation of food grains has steadily decreased in the last five years by about 30%.
  2. As a consequence of increasing incomes, the consumption patterns of the people have undergone a significant change.
  3. The food supply chain has structural constraints.

Which of the statements given above are correct?

[UPSC Civil Services Exam – 2011 Prelims]

(a) 1 and 2 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2, and 3


Answer: (b)        

Explanation:

  • Rising income and diversification of diets raising the demand for high-value food products, and thereby adding to inflationary pressures.
  • Using data from the National Sample Survey Organisation’s household consumption expenditure survey for 2009-10, expenditure elasticities were estimated for various commodities.
  • All the estimated elasticities were positive, with milk, vegetables, and fruits having elasticities exceeding one, indicating that an increase in household expenditure leads to a more than proportional increase in demand for these items.
  • Although the elasticity for meat and fish is below one, it is still significant enough to cause a notable increase in demand with rising food expenditure.
  • In an emerging economy with growing per capita income, the high elasticities for nutrient-rich commodities suggest a growing demand for these items.
  • There is a persistent gap between demand and supply for pulses, meat, fish, milk, and vegetables, which has led to increased food prices by 0.3% to 1.1% annually.
  • Factors such as fuel and agricultural wage inflation, as well as international food price surges, affect food inflation.

Consider the following statements:                                                                   The Parliament of India can place a particular law in the Ninth Schedule of the Constitution of India. The validity of a law placed in the Ninth Schedule cannot be examined by any court and no judgement can be made on it. Which of the statements given above is/are correct?

Consider the following statements:                                               

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Consider the following statements:                                                         The Parliament of India can place a particular law in the Ninth Schedule of the Constitution of India. The validity of a law placed in the Ninth Schedule cannot be examined by any court and no judgement can be made on it. Which of the statements given above is/are correct?

Consider the following statements:                                               

Read More »
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