You thought inflation was high? It might get higher.
The government plans to buy a heck of a lot more cereals, wheat and rice, and store them and let them rot. This reduces what you and I can buy from the market, which will obviously push prices higher.
From Business Standard:
To ward off any grain shortage once all states start implementing the ambitious food security law, the central government plans to increase the buffer stocking and strategic reserve limits of Food Corporation of India (FCI) for both wheat and rice.
According to a senior government official, the Cabinet is likely to take up a proposal on the matter this week. The move could push up the requirement by at least 50 per cent from the current norm.
Phenomenal, I say.
Of course, it won’t matter right now, because we are already at least 40% above the revised limits. Current stocks are 66 million tonnes, which is 50% more than even the revised buffer stock limit (of 44 million tonnes).… (Read On...)
