The political economy of food price policy: the case study of India
India did not experience any food price spikes during 2007–08 when global food prices erupted. It was partly due to India’s ban on exports of wheat and common rice India resorted to. But the fiscal stimulus that the government of India provided in 2009 in the wake of G8 countries’ and other major economies’ call to avert economic recession, coupled with one of the worst droughts India experienced in that year, led to rising food prices in India since mid-2009. Food price inflation has hovered between 8–12 per cent per annum since then. The nature of food inflation, however, changed from being cereals-led to high value products (fruits and vegetables, and protein foods) during 2010–11 and 2011–12. While food inflation invited severe political protests, the situation did not escalate to any riots or violence. The government has been trying hard to cool down food prices by reining-in fiscal deficit, tightening monetary policy, releasing more grains from public stocks, and distributing subsidized grains through the public distribution system to targeted population.