Sorry, inflation above 10 per cent cannot be brushed aside as ''routine''; it is hurting
Let inflation not be a routine affair; it is a serious issue afflicting the economy. We have to find a solution and that too on a serious note. And the buck stops with the government.
Reporting inflation numbers above 10 per cent in the wholesale markets and over 6 per cent at the retail level has become a routine affair. Sadly, the price rise of this level for important items of daily use like cooking oil, LPG, pulses and even travels by trains or buses cannot be dismissed as a routine thing; it causes immense pressure and pain to a common woman both in villages and cities.
This pressure is even more intense when there are fewer jobs and even those who have managed to remain employed are being subjected to wage cuts. Managements of corporate firms are often heard saying, on TV channels specialising in stock markets, how they have cut costs, mostly through rationalising their wage costs. One of them was bragging the other day as to how he has achieved a pre-Covid capacity utilisation employing only 65 per cent of the pre-pandemic staff. A neat gain for the company balance sheets at the cost of the laid-off employees or those forced to work on reduced wages.
For the record, the inflation measured by the Wholesale Price Index (WPI) remained at a highly elevated level of 12.07 per cent for June 2021 while the three months' average for the current financial year has been given at 11.91 per cent by the official data. At the retail level, the Consumer Price Index (CPI) at 6.26 per cent for June may appear less burdensome than the WPI gauge. But prices in the wholesale mandis shift to the retail level after a lag. And be warned, problems at the consumer level are not going away easily.
The pain is more visible at the granular levels. In the WPI gauge, the year-on-year increase in the prices of LPG in June was 31.44 per cent; for petrol and diesel, it was near 60 per cent. For vegetable oils, fats etc, the increase was over 44 per cent; for pulses, 11.49 per cent. In the retail gauge of CPI, the situation is somewhat different, but the underlying problem is the same. There is no safe place to shop.
Political parties have started staging token protests over petrol prices crossing Rs 100 a litre and diesel close behind. The government has stonewalled all this, as if all this were a routine affair. In the meantime, the poor and the so-called common men and women continue to suffer. The class divide between the rich and the poor, the urban and the rural is visible in terms of people ventilating their anguish. Depends who you talk to! The Covid-19-related economic stress, aggravated by the runaway prices of items of daily use, is hurting more than that the pandemic itself — this is how rural labourers or their brethren working in cities would tell you. Those blessed with white-collar, secure jobs in cities would give you a different take on how the nation needs to be protected against the impending fourth wave of coronavirus, whatever be the costs — vaccination, restrictions, lockdowns.
With the ebbing of the second wave of the pandemic, we do see a return of economic activities, including construction. In the rural landscape, the Kharif sowing has begun, re-opening opportunities for the labour force. No doubt, it is a sign of relief but the relief is limited by inflation.
In the middle of all this, the agriculturalists are in a peculiar and difficult situation. Besides suffering as consumers at the hands of inflation, they are made to bear a huge rise in input costs as growers for every crop. The input cost pressure is all-round — from fuel prices to rising prices of fertilizers, pesticides and wages. Rural wages, which had remained subdued, have started going up, as the overall inflation is providing a huge push factor. The additional rural wages, however, are not being pocketed by the workers but pick-pocketed by inflation.
Let inflation not be a routine affair; it is a serious issue afflicting the economy, more so in the hinterland, where kadva tel (mustard oil) has become a luxury that the rich alone can enjoy. One may dismiss the phenomenon as the consequence of global commodity price pressure and the so-called supply chain bottlenecks. But fixing the problem cannot be brushed under the carpet of these variables. These variables would stay. But where is the solution? We have to find one and that too on a serious note. And the buck stops with the government.
(Prakash Chawla is a New Delhi-based independent journalist. The views expressed here are his own.)