How onion toppled the Government

Yes, you read it right. Onion toppled the government.

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Onions are used in almost everything that Indians eat. Onions play very important role, not only in seasoning our curries, but for our economy and the government too. India is second largest producer of onion in the world after China.

In 2010, prices of onion, in India rose to ₹ 88 from ₹ 35 (per kg) in just one week. Indian Government had to ban the export of onions and even had to import it from Pakistan.

Essayist Nilanjana Roy termed it as “Ghost of the Great Onion Crisis of 2010” which haunted Mr Manmohan Singh’s government.

This wasn’t the first time when onions kicked the government out of the power. Once it did back in the year 1980. Due to sky high prices of onion, the central government of India was brought down. In 1998, again the prices of onion rose very high leading to ban on export & affecting citizens. This led to the fall of BJP government in State elections in Delhi.

It’s just not the onion which has such a power.

A similar job was done by “Salt” in the British era. When British officials levied tax on salt production, Indians stood strong against the British and victory of Salt March led to many other civil disobedience against British Raj. https://en.wikipedia.org/wiki/Salt_March

Another scenario was observed in the year 2018 which recorded the lowest onion prices affecting the rural economy badly. There is resentment in Indian farmers against Modi government which may set the mood for fall of BJP in 2019 General Elections. However, as Ruchir Sharma – Global investor and Author, said, “Chances are 50–50.”

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Basically, the government need to understand the fact that it must not mess with the common man.

In a country like India, where majority of the population, still, is either spending or making their largest share of income on food items, such price rise or fall of basic ingredient can make anyone fall flat on its face.

The amount of money govt spends on waving off the farm loans should rather be spent on facilitating the farmers by providing them proper storage facility, government crop support programme & eradicating the middlemen.

As per the article of India today dated 28 Dec 2018 – In Lasalgaon, the country’s largest onion trading hub, most farmers are selling their produce at Rs 2 per kg. But consumers in Mumbai are still shelling out Rs 20 for the same. Between Lasalgaon and Mumbai (a distance of 220 km), onions pass through at least four layers of middlemen, which leads to addition of a hefty margin at every stage.

Rather than defending party leaders, parties should defend country from inflation and bad deflation which pulls the economy down.

The projects of Modi government like ‘Make in India’, ‘Smart City Mission’ & many more definitely took the Indian economy off to a flier. But all of it gets overlooked if the govt is unable to contain inflation and bad deflation.

As Ruchir Sharma wrote in the chapter ‘The price of Onion’ in his book The Rise and fall of Nations “Low consumer price inflation is an indispensable buttress of steady growth. Any period of high growth is far more durable if consumer prices are rising slowly or even if they are falling due to a positive supply shock or good deflation”

Govt. need to keep a check on consumer price inflation. Let people enjoy onion in their curries and farmers enjoy return for their produce.