If the fiscal deficit was the reason why officialIndia resisted this seemingly irresistible demand，there were also warnings made from other quarters，less constrained by dogma，that the growth experience of the 1990s，continuing right till the early years of the 2000s，held quite a different message，with contrary welfare implications. It was a paradox of those years that an enormous accretion to food stocks with the government occurred despite a steep decline in the growth rate of agriculture. The excess of supply in other words，could have been achieved by suppressing the demand for food amongst the poor. Low growth rates in agriculture have been a feature of the years of liberalisation right till the current conjuncture. Yet these have also been a period of low inflation.

There is yet no credible economic theory that can explain the triple conjunction of declining per capita availability of essential food grain，rising inventories and low inflation in these mass consumption items. The low inflation experience of the years ofliberalisation seek another explanation，which may lie in the possibility of a harsh suppression of living standards at the lower end of the scale of income and wealth.

For ensuring its viability the rural jobsprogramme required that another serious complication in the labour market be attended to. A vast sea of unemployed workers was an assurance for agricultural capitalists who hired in farm labour，that the wages they paid would remain low. An employment guarantee would provide other options to the working population，forcing agricultural capitalist to hire in labour at likely higher wages. This would be transformed into a demand for higher support prices for the farm sector’s surplus producers，creating a quite different dynamic in terms of the budget deficit，the prices at which food items are sold through the public distribution system and-through the exertions of the various pressure groups involved-a massive upward spiral of inflation.

Have these factors begun to work within the macro-economy of ruralIndia？The jury is still out on the question，though there is little doubt that inflation，especially in food and other mass consumption items，has begun to be a serious worry. The Economic Survey for 2009-10 speaks of “high double-digit food inflation” during the year，“especially in the second half ”，as a “major concern”. Elsewhere，it attributes the rapid rise in prices of food items to “a deficient monsoon and expectations of shortage”.^[1]

Monsoon failure is a reflexive explanation for high food prices in a country where most crops are grown under rain-fed conditions and the majority depend for their livelihood on agriculture. In current circumstances，it is necessary to assess how credible this explanation is，by referring back to two recent years when rainfall deficiency was of a comparable magnitude.

In 2009，rainfall readings by the India Meteorological Department （IMD） put overall precipitation in the country at 77% of the long-period average. It is not quite easy to correlate rainfall deficiency with agricultural output and still less with inflation. But just to make the point abundantly clear，a comparison could be made with 2002，when country-wide rainfall was just 81% of the long-period average. Reaching back further，monsoon failure on a similar scale occurred last in 1987，when the national average was again，just 81% of the long-period average.

To take this comparison a little further，the official figure of inflation registered for the category “primary commodities” was 9.7% in 1987-88 and 2.6% in 2002-03. Addressing the theme of “Drought and Inflation”，the Economic Survey for 2002-03 made the claim that：“In recent years，the agricultural economy has by and large moved from a shortage to a surplus situation and is thus more insulated against the vagaries of nature. Therefore，despite the failure of monsoon，average inflation rate remained low thanks to surplus stocks of foodgrains during the last three years”.^[2]

Yet，for 2009-10，the rate of inflation for “primary commodities” stood at 8.8%，considerably above the figure for 2002-03 and very close to，though on the lower side，of the 1987-88 figure.

Sticklers for statistical accuracy may seek to explain these discrepancies in terms of four percentage points in rainfall-81% versus 77% of long-term average-between 2009 and both the earlier years of comparison，i.e.，2002 and 1987. The problem here is not just that the correlations are not one bit evident，but also that no relationship-even an approximate one-has been devised yet between rainfall deficiency，agricultural production and the behaviour of the market in grain.

Neither is the storage situation in grain a viable explanation for this seeming paradox，since the surplus-indeed the embarrassment of riches-has been a feature of the aftermath of the 2009 drought，as much，if