High inflation has been a big roadblock to India's growth in recent years. And one of the key drivers of this high inflation has been rising food prices. Who is the real culprit for this? You think the real reason is poor monsoons last year? You couldn't be further from the truth if you think so. The real culprit appears to be none other than the UPA government. And the problem at hand is not food shortage. But a problem of plenty!

Let us explain. The Food Corporation of India (FCI) buys rice and wheat from farmers at the minimum support price (MSP) set by the government. These food grains are then distributed by the government through various programmes via the public distribution system. Apart from this, the government also procures food grains to maintain buffer stocks. These buffer stocks are kept so as to be in a position to deal with any unexpected shock that could disrupt supplies. There is a minimum buffer level that is needed. This is understandable.

Here's the irony... What happens when you're hoarding too much buffer stock? You end up creating an artificial scarcity in the market. As per an article in Business Today, the government has been hoarding more than twice the minimum food grain buffer needed. Sometimes as high as three times! The result is that despite the abundant supply, food inflation has been persistently high.