Simplified Laws Guide to Taxation and Legal Concern Everyone knows its meaning; back to square one means you have to start working on a plan from the beginning again and the progress you made till now is wasted. I understand that the first time this phrase was used in print media was in 1952. Maybe this phrase is borrowed from Football or ‘Snakes and Ladders’ or Hopscotch!
We have many instances of back to square one in the recent past.
A couple of weeks back, dollar came down to 58+; that was when our ‘Experts’ in Money matters had predicted dollar touching 50. A couple of days back, dollar went up to 60+; so our ‘Experts’ started predicting dollar touching 65 or even touching its new high. (Thank you experts; God bless those who have taken financial positions based on expert views!)
After Sachin’s retirement, it was Onion which scored 100. After dismal predictions of Monsoon, Onion is inching to reach where it was in the previous year.
Syria Crisis was the reason for Crude Oil price touching 116 USD per barrel in 2013; now the price of oil per barrel is 113 on account of Iraq crisis.
That’s why I said we are back to square one.
Let me take up the Onion Issue in this article.
Predicted delay in Monsoon, shortage of seeds, damage of crops due to unseasonal rain, etc may raise the inflation from bad to worse. The food prices may soar thereby causing a deep ‘talk of the town’ problem to the New Government.
It was the same BJP which made a big issue during last year about food prices, especially the increase in Onion prices. In order to escape the embarrassment, the Modi government has taken some measures (well in advance) to tackle the anticipated increase in food prices.
One such measure is imposing Minimum Export Price (MEP) for export of onions. The Commerce Ministry has fixed 300 USD per ton as MEP for export of onions.
How Minimum Export Price (MEP) will help to reduce price in India?
It’s simple common sense. At USD 300 per ton, onions from India become expensivein the international market as compared to other countries.So the buyers from the international market reduce buying from India.
This leaves no other choice for the traders/exporters/merchants but to sell onions in Indian markets. It’s simple economics, more the supply of onions, lesser will be the price! This is how MEP will help to reduce the prices of Onions in India
Selling rice from Government reserves: This is another measure by which the supply of rice will increase thereby stabilizing the prices.
Some more measures are expected from the government in days to come. I will write about it as it comes.
Till then, I can only say that ‘our long wait is not yet over’; hope achhe din aane wale hai!
