One of the many boasts of the Modi government is that it has reduced inflation to virtually nothing in the last four years. It cites figures from the official wholesale price index to buttress this claim. However, the fact is that even the government’s own consumer price index estimates that prices in rural India have risen almost 21% on average between May 2014, when this government was formed, and April 2018, the last month for which the index is available. In urban areas, the index suggests prices have risen by about 17%. The reality that the people experience on a daily basis makes even these numbers seem like a bad joke.
In any case, these figures at best capture the variation over a period. What they do not tell you is the skyrocketing spikes in prices of specific commodities from time to time over these four years. For example, arhar dal prices had reached Rs 200 per kg in Sept-Nov 2015. Sugar prices had crossed Rs 50 a kg in early 2017. Onion prices had crossed Rs 100 a kg within the first year of the Modi government and have seen repeated spikes since then too. In October 2015, mustard oil prices had reached over Rs 150 per kilo.
For the relatively well-off, such spikes in food prices might be just temporary problems, but for the poor who are eking out a living, the weeks or months for which these spikes typically last means having to consume less. There are enough methods available to a government that wants to do so to prevent such volatility, but the Modi government has chosen not to do so. It would rather let the market have its way, never mind the price paid by the poor.
It is a tragic irony – and a damning indictment of Modi sarkar’s policies – that even as prices of food items have sky-rocketed up, farmers are on the roads because they are not getting suitable prices. This is primarily because the prices of inputs that they use – fertilisers, pesticides, diesel, fodder, etc. – have continued to mount inexorably while the prices they are given in the market or by govt. are nowhere near that. For instance, justin one year, the price of high speed diesel used for irrigation pumps went up by 23.7% between 2015-16 and 2016-17. Similarly, cattle feed went up by nearly 11%. In Modi’s rule all these prices have increased bringing widespread misery for farmers.
Health services and education – both essentials for a decent human existence – continue to become increasingly costly as the government pushes the expansion of the private sector in these areas. While making a big noise about reducing stent prices and prices of orthopaedic implants, the Modi government is actually putting in place policies that will make basic healthcare increasingly unaffordable not just for the poor but even for the middle class. Its faith in the discredited PPP (publicprivate partnership) model and in health insurance rather than public provisioning of health as the panacea is evident from the policy proposals emanating from the Niti Aayog. This is a recipe for disaster and impoverishment of millions.
The biggest betrayal by this government on the price front, however, has been its cynical use of low international oil prices to rake in taxes rather than pass on the benefits to the people. Consider the facts. As of May 22 this year, the price of diesel in Delhi was Rs 68.08 per litre, the highest level it has ever reached while petrol was at its highest level at Rs 76.87 and both have been rising steadily. The trend is the same in other cities and states, except that the price levels are even higher. Why are prices so high? The government’s claim is that the oil companies are allowed to set their own prices since they were making losses when the government administered the price. Forget for the moment the fact that these same apparently autonomous companies were persuaded to keep prices frozen for almost three weeks during the course of the Karnataka elections. The truth is that less than the half the price you pay for petrol, about 48% in Delhi, goes to the oil companies and in the case of diesel this proportion is only slightly higher at about 59%. The rest is in the form of taxes. The government’s own data shows that the Centre’s share of taxes on petroleum crude and products has risen from Rs 1.26 lakh crore in 2014-15 to Rs 2.73 lakh crore in 2016-17, the last full year for which this data is available. That’s an extra Rs 6,000 per family every year. The government would argue that this burden is only borne by those who buy petrol or diesel and the poor don’t. But even those who don’t buy diesel directly pay for it in the form of higher transportation costs for everything they buy.
In any case, these figures at best capture the variation over a period. What they do not tell you is the skyrocketing spikes in prices of specific commodities from time to time over these four years. For example, arhar dal prices had reached Rs 200 per kg in Sept-Nov 2015. Sugar prices had crossed Rs 50 a kg in early 2017. Onion prices had crossed Rs 100 a kg within the first year of the Modi government and have seen repeated spikes since then too. In October 2015, mustard oil prices had reached over Rs 150 per kilo.
For the relatively well-off, such spikes in food prices might be just temporary problems, but for the poor who are eking out a living, the weeks or months for which these spikes typically last means having to consume less. There are enough methods available to a government that wants to do so to prevent such volatility, but the Modi government has chosen not to do so. It would rather let the market have its way, never mind the price paid by the poor.
It is a tragic irony – and a damning indictment of Modi sarkar’s policies – that even as prices of food items have sky-rocketed up, farmers are on the roads because they are not getting suitable prices. This is primarily because the prices of inputs that they use – fertilisers, pesticides, diesel, fodder, etc. – have continued to mount inexorably while the prices they are given in the market or by govt. are nowhere near that. For instance, justin one year, the price of high speed diesel used for irrigation pumps went up by 23.7% between 2015-16 and 2016-17. Similarly, cattle feed went up by nearly 11%. In Modi’s rule all these prices have increased bringing widespread misery for farmers.
Health services and education – both essentials for a decent human existence – continue to become increasingly costly as the government pushes the expansion of the private sector in these areas. While making a big noise about reducing stent prices and prices of orthopaedic implants, the Modi government is actually putting in place policies that will make basic healthcare increasingly unaffordable not just for the poor but even for the middle class. Its faith in the discredited PPP (publicprivate partnership) model and in health insurance rather than public provisioning of health as the panacea is evident from the policy proposals emanating from the Niti Aayog. This is a recipe for disaster and impoverishment of millions.
The biggest betrayal by this government on the price front, however, has been its cynical use of low international oil prices to rake in taxes rather than pass on the benefits to the people. Consider the facts. As of May 22 this year, the price of diesel in Delhi was Rs 68.08 per litre, the highest level it has ever reached while petrol was at its highest level at Rs 76.87 and both have been rising steadily. The trend is the same in other cities and states, except that the price levels are even higher. Why are prices so high? The government’s claim is that the oil companies are allowed to set their own prices since they were making losses when the government administered the price. Forget for the moment the fact that these same apparently autonomous companies were persuaded to keep prices frozen for almost three weeks during the course of the Karnataka elections. The truth is that less than the half the price you pay for petrol, about 48% in Delhi, goes to the oil companies and in the case of diesel this proportion is only slightly higher at about 59%. The rest is in the form of taxes. The government’s own data shows that the Centre’s share of taxes on petroleum crude and products has risen from Rs 1.26 lakh crore in 2014-15 to Rs 2.73 lakh crore in 2016-17, the last full year for which this data is available. That’s an extra Rs 6,000 per family every year. The government would argue that this burden is only borne by those who buy petrol or diesel and the poor don’t. But even those who don’t buy diesel directly pay for it in the form of higher transportation costs for everything they buy.
