One of the main planks of Narendra Modi’s election campaign was his promise to curb inflation. With people reeling under the relentless rise in prices of essential commodities, Modi’s ‘Enough is enough of the blows of price rise – Vote Modi Government’ (Bahut ho chuki mahengai ki maar – ab ki baar Modi Sarkar) slogan touched a chord with people. However, in Modi’s first month in power, his Government has intensified the blows of price rise all around, without even waiting for any discussion in Parliament. Such arbitrary and ruthless price rise marks only an accentuation of the UPA-II’s policies. And even the excuses peddled by the Modi Government are the same old ones peddled by the Manmohan Singh Government!
Huge hikes have been effected in passenger rail fares. Freight charges have not been spared either, which would have a cascading effect on the prices of essential commodities that are transported by rail. Sugar prices have gone up. And the prices of essentials, especially retail prices of onions, are also soaring. Petrol and diesel prices have been hiked, and non-subsidised cooking gas (LPG) has been hiked by Rs 16.50 per cylinder. Gas prices are due to be hiked, which will lead to a hike in the prices of urea. In sum, common people, the poor, and farmers are feeling the brutal blows of price rise – and the blows are especially painful because they carry the sting of shamelessly broken election promises.
Hoarding and speculation are responsible in considerable measure for the hikes in prices, and the BJP Government is yet to take any effective measures to crack down on the hoarders and speculators.
Neoliberal apologists of the Modi Government have tried to blame the price rise on the nominal increases in Minimum Support Price (MSP) of paddy and pulses announced by the Government, accusing the latter of ‘buckling to demands of farmers’. In fact, the increases in MSP are far from adequate, given the fact that the costs of production have steeply risen and government support for farmers has been severely cut back. The Government does not even acknowledge the urgent need to tackle the deeper structural causes of price rise – i.e, the need to invest in farm subsidies for fertiliser, irrigation, power, and infrastructure, so as to bring down production costs.
Moreover, price rise does not benefit the farmers. Take the example of the hike in sugar prices. The Modi Government announced substantial benefits to the sugar mills, with a hike in import duty and reduction in export duty as well as continuation of doles by way of massive interest free loans. But the Government made no attempt to ensure that the sugar lobby paid its astronomical arrears (to the tune of 110 billion rupees) to sugarcane farmers!
Increase in import duty on sugar could be a welcome measure if it were accompanied by measures to ensure that the benefits reached the cane farmers. Instead, although there is no supply constraint, the hike in import duty was treated by the sugar lobby as a signal to hike domestic sugar prices instantly! It is also to be noted that the Union Transport Minister Nitin Gadkari, who has substantial sugar lobby interests in Maharashtra, attended the meeting which took the decisions that have brought a bonanza for the corporate sugar mills, no relief for sugarcane farmers, and woes for consumers.
The impending hike in gas prices will, likewise, benefit Mukesh Ambani’s Reliance. Since gas accounts for 4/5ths of the costs of making urea, the hike in gas prices will undoubtedly push urea fertiliser prices up, creating an extra burden on fertiliser subsidies and farmers.
The Modi Government is busy blaming all its anti-people decisions on the previous Government. Modi, in his blog on completion of one month of the Government, has said that the Government, while working in ‘national interest’, has not ‘communicated’ its decisions properly. Justifying burdens on people and bonanzas for corporate lobbies in the name of ‘national interest’ is something that all neoliberal regimes, including the previous UPA-II Government, excelled in. The people of the country are not willing to wait indefinitely for Modi’s ‘acche din’ promises. If the Modi Government imagines that corporate-backed ‘communication’, that brought it to power, can keep people’s disappointment and anger at bay, it will be sorely mistaken.