FEELING THE PINCH

The State Government can do quite a bit to pacify its citizen consumers and provide some help to tide over the current inflationary phase in the State.
As the State with the highest per capita consumption expenditure (the total payment made by households for consumption of goods and services) in the country, Kerala has special reason to be concerned about the recent inflationary trends.
According to the Kerala State Planning Board, while in the 1970s, the average consumer expenditure per person for a period of 30 days in the rural sector of Kerala was almost close to that of the rural area in the rest of India, from 1980 onwards it began to exceed that of India and in 2002 it attained a level which exceeds that of India by 66 per cent.
PRICE SPIRAL
Such a propensity for consumer spending could imply that the State's citizens are watchful of price trends. These have not been encouraging lately.
According to reports, the prices of food products such as pulses, fruits, vegetables and eggs have increased on an average by as much as 40 per cent in the past year. Garlic prices have shot up by 115 per cent, red chillies by 97 per cent and onion by 92 per cent.
GOVT RESPONSE
The government's response has been predictably lame. It announced that the Kerala State Civil Supplies Corporation (Supplyco) would intervene strongly in the market to hold the price line.
Even as Chief Minister V.S. Achuthanandan assured the citizens that traders would bring down prices by five per cent, the Kerala Co-operative Milk Marketing Federation Ltd (Milma) announced a hike of Re 1 per litre of milk sold through its outlet.
ROLE OF PDS
With the virtual abandonment of the once-pivotal public distribution system (PDS), Kerala has had to search for alternative means of ensuring supply of essential goods. At one time, Kerala had the distinction of being the only State with a PDS that reached every resident of the State.
According to the Fifth Report of the Kerala Administrative Reforms Committee, Kerala boasted a universal system of statutory rationing covering the entire population (excluding only children below two years of age), which has been hailed as the most effective PDS in the country.
POLICY MEASURES
It is the responsibility of the Central Government to initiate appropriate macroeconomic policy measures to reduce inflation, like reducing Customs duties and tightening liquidity, the State Government can do quite a bit to calm down its citizen consumers and provide some succour to tide over the inflationary phase.