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Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster
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What's fuelling food crisis? 
(Mon, 28 Oct Pre-Open) 
 
Food security and power /energy security are two of the crucial aspects for any economy. However, India cuts a sorry figure with regards to both. It is not that we lack resources. But the lack of proper infrastructure and policies has been a spoilsport. It is indeed shameful that while nations like Singapore despite being natural resource deficient have come a long way, we despite being rich in natural resources are struggling with some of the basic economic issues like food and power.

While agriculture remains the key occupation of the majority population, the country is witnessing spiraling food prices. As an article in Economic Times points out, the problem is not at the production level. Around 40% of the perishable food items never reach the customer and get wasted for the lack of cold storage and efficient transportation network.

Interestingly, the food security in the country is very closely linked to the power/energy security. Cold chains need huge, uninterrupted power supplies. Unfortunately India is already power starved due to the shortage of coal supplies. This is really ironical since country has some of the world's largest reserves of coal. But due to inefficient management and callous attitude of the Government, the potential remains unharnessed. It's been two decades that the wave of liberalization hit India. But a sector as crucial as coal is yet to experience it. The fate of the nation has been left in the hands of just one public sector undertaking - Coal India Ltd that has clearly failed in doing its bit. Coal mining largely remains the monopoly of CIL. The lack of competition and private sector participation has bred inefficiencies and led to shortage of coal. And this is just a part of the problem as far as power segment is concerned. Subsidized power in the country and power theft has made the sector financially unviable and there is hardly any incentive to invest in the sector.

The solution to the power crisis and food crisis lies in framing the right policies for both the sectors. However, a reform is unlikely to happen as long as economic interests of the country are getting compromised for political motives. The subsidies apparently designed to benefit the common man are hardly of any help. Not even something as basic as onion, touted as poor man's food has been spared. If the Government had invested this money squandered on subsidies on investment opportunities, it would have been a different story and a win-win situation for all. But what we have ended up with is high fiscal deficit, food crisis and power crisis. We hope the Government wakes up soon and acts on policy reforms and actions before things get out of hand.

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