The Burden Of Rising Inflation
The India Commentary view
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By Our Editorial Team
First publised on 2022-04-08 15:43:50
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The India Commentary view
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Rising inflation has put the people under immense pressure. Food inflation is at record levels and the household budget is going haywire. Fuel prices have risen by Rs 10 after a gap of 4 months putting additional pressure. Cooking gas prices are hitting the roof. With the rise in fuel prices transportation has become costlier and almost everything will become more costly. Medicines, even the normal ones, have seen a steep upward price revision. For example, the price of liquid antacids has been raised by more than 50% in the last 3 months. The common man is being burdened from all sides and the statements issued by the government give him little hope.
Inflation has been the undoing of many governments but strangely, the NDA government is unperturbed. The Hindi saying munh mein khoon lagna is apt for the way the government has done nothing to prevent fuel price rise. It kept prices at a high level throughout the pandemic and collected huge taxes to fund the pandemic-related expenses when GST collections were very low. Since the people did not protest, it does not even think of lowering Central taxes on fuel now as that will mean loss of revenue. But now that GST collections are at a record high, taxes on fuel must be lowered to prevent the cascading effect from taking inflation to unbearable limits.
It is true that the war in Ukraine has disrupted supply chains and commodity and fuel prices have sky-rocketed. But isn't the government supposed to do something about it other than passing on the burden to the people? It must realize that salaries have been cut, many people have lost their jobs and earnings from small businesses have dropped to very low levels and many have had to close their businesses due the disruptions caused by the pandemic. In these tough times, some people are living off their savings. The condition of pensioners and migrant workers is also very bad.
As a first step to reduce inflation, both the Centre and the state governments must reduce taxes (which are among the highest in the world) on fuel. Then, the Centre must stop drug manufacturers from arbitrarily increasing prices of medicines. Watch must be kept on food inflation and prices of vegetables, fruits, eggs, meat and poultry must remain stable. With consumer demand refusing to rise significantly, rising cost-push inflation at this stage is not good for the economy. Also, when inflation starts pinching the pocket too much, appeals of Hindutva and nationalism will not be enough to make people press the desired button on the EVM.
