Onion keeps govt teary-eyed

NEW DELHI: Empress Marie Antoinette of France, often quoted as having told the pre-French Revolution public that they should “eat cakes” if they didn’t have bread, would have appreciated the irony. It’s a good time here to subsist on dwarf potatoes and sugar.

More so since the pride of Indian cuisine, the pungent bulb onion, is showing little sign of a price downspiral over the past several weeks countrywide, selling in key metros currently at a high of between Rs 16 and Rs 20 per kg.

Compare that with the Rs 7-9 per kg in the same period last year. The onion has doggedly clung on to high retail prices and shown no let-up since October last year, leaving finance minister P Chidambaram groping for answers to the sensitive question of containing high inflation and slow but steady political ratings attrition.

By the first week of February, it was almost a month-and-a-half that the prices of onions increased by a steep 50%, leaving the public nonplussed. Traders attributed the sharp hike in prices to low production in the midst of unseasonal rains. Prices hovered at Rs 100 per 10 kg by February 2 in the wholesale market while in retail, onions were being sold at Rs 20 per kg.

Whereas in January, wholesale prices were only Rs 50 per 10 kg while the retail figure was Rs 10 per kg. For the week ended January 27, inflation hit a two-year high of 6.58% although one among the FM’s ‘usual suspects’, sugar, plummeted in wholesale price to Rs 1,100 per quintal, lower than the PDS price of Rs 1,300-odd.

Going by conventional calculations that led to a FM-buttressed sugar export ban for six months, that should have made a noticeably happy dent on inflation. But onions know their inflation. Tomatoes, another “core” vegetable, continued at a retail high of around Rs 20 per kg since October-November last year.

Dwarf potatoes, meanwhile, are the only vegetable to sell for Rs 10 retail price for a two and a half kg. Even mushrooms, not so seminal to Indian cuisine but consumed well in urban India in winter, has stayed at a consistent price of Rs 20 per packet retail, more than twice the price it sold for in other years.

It may not yet be a replay of the 1998 scenario that left the ruling BJP lachrymal in Delhi and Rajasthan and blocked it in MP — prices shot up to Rs 60 per kg that year and even disappeared from vegetable bazaars — but onion is threatening to leave little undone in keeping both the finance minister and his colleagues in the UPA tearful on the price front — even Wikipedia is facing pressure to remove its description of the vegetable as “cheapest and most widely available” in India.

And it’s all not just because of the WPI and record inflation. Take Chandigarh, the capital of election-bound Punjab. The deceptively dainty bulb from the lily family once sold at Rs 5 per kg, less than half the price it sells today.

In Lucknow, the capital of another key poll-bound state this year, the onion currently retails at over Rs 16 per kg compared to only Rs 5.50 per kg same time last year.

Imphal, the capital of Manipur which is also in the midst of election fever, may not figure on the list of centres to be monitored by the Price Monitoring Cell of the Centre’s consumer affairs department, but onions ruled at a high of Rs 16 and over per kg in both next door Agartala and Shillong in January-end compared to between Rs 7 and Rs 9 per kg same time last year.

In Gujarat, a key state that is set to have its Assembly polls towards the end of the year, the onion sold at Rs 12-odd per kg as against half the price same time the previous year.

The onion and, to a lesser extent its oft-used allies in the vegetable world with whom it mostly tangos in Indian curries and masalas —tomatoes and potatoes — are perceived by political pundits as holding the key to the UPA’s image and politics, impinging on the electorate’s ratings of both its key drivers, PM Manmohan Singh and Sonia Gandhi.

All the more crucial politically, since pundits view the elections in early 2007 as distinctly different from earlier post-2004 Assembly elections. The polls in Uttarakhand, Punjab and Manipur, if not that in UP later in the year, are perceived as a “mini-referendum” for the Congress-led UPA which has only recently been see-sawing on key reform questions like FDI in retail and all-out backing to SEZs.

Both the Congress and key rival, the BJP, have high stakes in the upcoming mini-referendum this year, which is seen, in fact, to set the stage for the general elections of mid-2009.

But the big killer on policies could really be prices. And essential commodities, otherwise the nuts and bolts of daily life of the dal-chawal-atta-subzi variety virtually rule the roost here.