The persistent increase seems to be finally ringing alarm bells, with state governments across the country fighting to bring down prices. Higher onion prices have not only added to high food price inflation, but also rattled governments over the years, for example contributing to the defeat of the Bharatiya Janata Party (BJP) in state elections in Delhi in 1998. Hence the alarm!
Yet, the political response this time has been as myopic as in the past. Politicians seem to be demanding everything ranging from a ban on exports to special subsidized shops in urban hubs but barely speaking about what is actually needed: a structural solution to tame price volatility in commodity markets. Read More