Export restrictions on agricultural products are not fair to farmers who are denied the opportunity to earn money, Finance Minister Nirmala Sitharaman said, but added that most governments struggle to balance the interests of farmers and consumers.
“That is not the case and I would not hesitate to admit that. But others might question whether it is fair to the consumer. I am stuck in the middle. I want to support the farmer; I do not want unpredictable restrictions on exports. But if in our country, market prices are skyrocketing, the consumer also comes to the government and asks what are you doing for him,” the Finance Minister said on Saturday at the India Today-Business Today roundtable on Budget 2024.
She was responding to a question about whether export restrictions are fair to farmers who have the opportunity to earn more when export markets are well-paid, but then face such restrictions.
The minister stressed that consumers are complaining that the crops (food) that are grown in the country and that they need are allowed to be exported and not sold to consumers. “So there is a balance that governments are struggling to achieve. And I am not just talking about our government, most governments are struggling to achieve this,” she stressed.
Meanwhile, responding to a question on the economic survey’s suggestion to exclude food items from inflation for the purpose of inflation targeting, the Finance Minister said the survey is prepared by the Chief Economic Advisor and his team and the Finance Ministry is maintaining a safe distance from it, but said it is a topic worthy of discussion.
« Although this report comes from the Ministry of Economic Affairs, it is prepared by the chief economic adviser, but we keep a certain distance from him. So it is not necessarily the work of the ministry, » she said.
She said, however, that it was a topic worthy of discussion, but that neither she nor anyone else could make an immediate statement on it, as it required much more thought and discussion.
The survey found that rising food prices are most often not demand-driven but supply-driven, adding that short-term monetary policy tools aim to counter price pressures resulting from excessive growth in aggregate demand.
“Deploying them to address inflation caused by supply constraints may be counterproductive,” he said, while suggesting that it is worth studying whether India’s inflation targeting framework should target the non-food inflation rate.