The WSJ reports on the troubles that seasonal rains have brought to northern India. The federal government had previously bought up large quantities of local wheat and rice, and now has no place to store it, so seasonal rains are washing the rice away or causing it to rot. One New Delhi-based think tank says that the solution is simply to bring in the private sector:
It is gross mismanagement and negligence...If only you had handed over the grain to the private sector, not a grain would have been lost. But now, it is nobody's grain.
Unfortunately, it is not quite as simple as that. The process for private firms to build warehouses in India is far from straightforward. The Doing Business indicator for Dealing with Construction Permits measures the procedures, costs, and time to build a warehouse. In the last round of Doing Business, India ranked 175 on this indicator (out of 183 economies). The private sector may be able to solve this problem, but it will need a better regulatory environment if it is to be able to respond quickly to demands like seasonal rains.
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