IPA Newspack
  • Home
  • now
  • politics
  • business
  • markets

IPA /

IPA Special

IPA Special

Modi Govt Continues To Run Away From Vexed Inflation Issue

By K Raveendran

Parliament has been witnessing a standoff between the government and the opposition over the issue of price rise and inflation, with the opposition demanding urgent debate on the issue and the Modi government showing the inclination to go to any extent, including suspension of over a scores of members belonging to the opposition parties, to prevent such a discussion taking place.

As the monsoon session of parliament gets into the last leg, with only less than a fortnight left for closure, the government has finally conceded to the opposition demand to hold a discussion. The opposition considers this as a great moral victory, although the house proceedings have, as expected, failed to bring any relief to the people, hit hard by rising prices on the one hand and a squeeze on their pockets through various means, including the additional levies on essential goods under the government’s controversial and half-baked GST regime.

The very refusal of the government to discuss the issue in parliament is an oblique way of admitting failure to control inflation, which opposition political parties attribute mainly to the wrong policies of Narendra Modi’s ruling National Democratic Alliance (NDA). The government response has provided a boost to the opposition parties to come together on a common platform, at least in putting up a strong fight against the government. But the government response to the opposition concern made it clear that it persists with the approach of running away from the problem.

The debate and the government response, including the reply by finance minister Nirmala Sitharaman, showed there is no change in the government’s approach. To the extent that the government acknowledged the problem, it was blamed on extraneous reasons. For instance, Nirmala Sitharaman defended the decision to levy higher GST on packaged food items, saying the state finance ministers had agreed to the move at the GST council and accusing the opposition-ruled states, which have created a ruckus over the issue since its announcement, of hypocrisy.

As has been her practice, Nirmala Sitharaman seems to be happy as long as she can claims that the numbers sound better compared to what they were at the time of UPA government. She said inflation, despite being very high, was lower than what the Manmohan Singh had left behind when Modi came to power. Also, the idea of blaming external factors is preposterous, as there is no dispute over what caused the inflation and the issue is how the government has failed to manage it.

Inflation has refused to be tamed, with the country now accounting for the second highest slot among all major south east Asian countries. Only Thailand has a bigger inflation among the larger Asian economies.  The Indian rupee has been consistently hitting fresh lows against the dollar, partly due to the strength of greenback and partly due to problems in India’s finance, caught up in a vicious cycle of high oil imports and poor domestic consumption demand in the economy.

Food inflation has been particularly worrisome. Consumer food price inflation has risen from 0.68 percent in September 2021. Domestic budgets have felt the pinch as Modi’s ill-conceived demonetisation and later the pandemic-induced lockdown robbed people of their livelihood, in the process sucking up all the demand in the economy. As things began to look up in the wake of the country and the world gaining control over the dreaded coronavirus, the war in Ukraine came like a bolt from the blue, affecting almost every sphere of economic activity. The food sector was particularly hit as the supply chain got completely disrupted, triggering run-away price increases in food items.

The war led to unrelenting spikes in petroleum prices as the West sought to hit the Russian economy through a blockade of Russian oil, with Brent prices hitting record levels. With so-called open market pricing in force, this meant that petroleum companies were jacking up prices by the day, reaping a bonanza, which came to light when the government enforced a windfall tax on these companies for the additional profits they raked in due to the high prices. India flouted the west-brokered embargo by citing national energy security to buy up Russian oil, which was offered on deep discounts, providing some relief to the oil import bill.

In a bid to manage widespread discontent and the possible political fallouts of it, the government finally reduced diesel and petrol prices by Rs 9.5 and Rs 7 per litre respectively, but this was not enough to bring down fuel prices to manageable levels for the ordinary consumers. Multiple instances of LNG prices had a spill-over effect on various sectors, making life difficult for the average citizens.

Nomura said in a report India’s food inflation will likely see the highest print at 9.1 per cent in the second half of 2022 due to rising feedstock costs. The report also sees food inflation surging in the second half of the year for entire Asia. China’s stringent Covid measures along with swine fever in Thailand and an excessive heat wave in India are some of the reasons that could spur food prices further, it added. The impact of inflation on the economy as well as the lives of people prompted Nomura to cut its 2023 forecast for economic growth in India, as measured by the gross domestic product (GDP), to 4.7 per cent from its earlier projection of 5.4 per cent amid recession fears and rising interest rates.

The situation prompted opposition parties to even compare the Indian situation to that of Lanka, where the rulers have been on the run in the wake of popular uprising against the ruling establishment, marked by people running down and occupying the grandiose buildings of the president and the prime minister, forcing them to flee the island nation. Congress leader Rahul Gandhi even held a press conference to claim that India under Modi was looking a lot like Lanka as his party slammed the prime minister for ‘record wholesale inflation’. (IPA Service)

IPA Special

BJP Leaders Have Started Course For Overthrow Of Nitish Kumar Regime

August 17, 2022
IPA Special

Decoding My Seventy-Two Years In Independent India-Part Two

August 17, 2022
IPA Special

Reining In ‘Freebies’ Needs Thorough Debate

August 17, 2022
IPA Special

Release Of The Eleven Imprisoned Rapists Of Bilkis Bano Is Atrocious

August 17, 2022
IPA Special

Heyday For Geopolitics Of Eurasian Transport

August 17, 2022
IPA Special

Jagdeep Dhankar Had A Chequered Career Involving Many Political Parties

August 17, 2022
IPA Special

NATO Expansion Into Finland And Sweden A Danger To World Peace

August 17, 2022
Happening Now

DMK moves Supreme Court over ‘freebies’ term scope

August 17, 2022
Politics

R’sthan Cong Rs 20 lakh aid for slain Dalit boy’s family

August 17, 2022
Politics

Gehlot vs Pilot fight resumes ahead of polls next year

August 17, 2022
Happening Now

Azad quits J&K Cong panel within hours of appointment

August 17, 2022
Happening Now

Meira Kumar says ‘Chamar’ used as slur against her father

August 17, 2022
IPA Special

Prime Minister’s Five Pledges On Independence Day Mean Very Little To Poor

August 16, 2022
IPA Special

Labour Movement Has Lost Its Earlier Striking Power

August 16, 2022
IPA Special

Decoding My Seventy-Two Years In Independent India

August 16, 2022
IPA Special

Prime Minister Narendra Modi’s ‘Achhe Din’ Now Needs 25 Years More

August 16, 2022
IPA Special

Donald Trump Is On Dock Over FBI Seizures Of Classified Documents From His House

August 16, 2022
IPA Special

Bihar Developments Are Going To Have Impact In Uttar Pradesh In 2024 Polls

August 16, 2022
IPA Special

Amrit Mahotsava Has Been Turned Into A Big Jumla By Sangh Parivar

August 16, 2022
IPA Special

For Global Arms Dealers, Russian War In Ukraine Is A Big Bonanza

August 16, 2022

An appeal

The legacy of IPA, founded by Nikhil Chakravartty, the doyen of journalism in India, to keep the flag of independent media flying high, is facing the threat of extinction due to the effect of the Covid pandemic. Only an emergency funding can avert such an eventuality. We appeal to all those who believe in the freedom of expression to contribute to this noble cause.
Click here to learn more

Share

Reply

  • 0
More on IPA

BJP Leaders Have Started Course For Overthrow Of Nitish Kumar Regime

August 17, 2022 3:33 pm | IPA Staff

  By Arun Srivastava   It was certainly not a coincidence that on the day Prime   Minister was addressing the Independence   Day rally, Amit Shah...

IPA Special

Decoding My Seventy-Two Years In Independent India-Part Two

August 17, 2022 3:32 pm | IPA Staff

  By Nitya Chakraborty   In 1960, at the global level, the most important development was the World Conference of the   communist parties, the result...

IPA Special

Reining In ‘Freebies’ Needs Thorough Debate

August 17, 2022 3:30 pm | IPA Staff

By Dr. Gyan Pathak   The ongoing freebies case in the Supreme Court of India has reached an interesting stage with the DMK seeking to...

IPA Special

Release Of The Eleven Imprisoned Rapists Of Bilkis Bano Is Atrocious

August 17, 2022 3:30 pm | IPA Staff

By Sushil Kutty   Monday, the eleven   persons   who gang-raped Bilkis Bano during the 2002 Gujarat communal riots walked free. The panel that let them...

IPA Special

BJP Leaders Have Started Course For Overthrow Of Nitish Kumar Regime

in IPA Special
Aug 17, 2022   ·  

Decoding My Seventy-Two Years In Independent India-Part Two

in IPA Special
Aug 17, 2022   ·  

Reining In ‘Freebies’ Needs Thorough Debate

in IPA Special
Aug 17, 2022   ·  

Leave a Reply Cancel reply

You must be logged in to post a comment.

Follow us on
Up Next: Personal data protection bill withdrawn after criticism
©2020 -2021 India Press Agency, All Rights Reserved
Newspack by India Press Agency
Posting....
logo
  • Home
  • now
  • politics
  • business
  • markets