The Great Indian Price Puzzle: Who Is Truly Responsible for the Price Hike?
India, a country of over 1.38 billion people, has seen a notable increase in the prices of commodities since 2019, the year following the global pandemic. The question arises, who is truly responsible for this price hike? Is it the Modi government, or are the consumers themselves to blame for choosing a leader with humble beginnings?
Global Context and the Impact of the Pandemic
It is important to place this issue in a wider global context. Long before the pandemic, the world had increasingly become an interconnected entity, where events in one part could have cascading effects across the globe. For instance, a nation might start a bio-war, while another might rush to develop and distribute vaccines. Such global dynamics contribute to price fluctuations and should be considered when analyzing domestic price hikes like those in India.
The production of goods and services has decreased in many parts of the world, while their demand has continuously increased. This disparity naturally leads to price hikes. Moreover, India's population, which comprises around 17.76% of the world's population, has not seen a proportional increase in the production of goods and services. Therefore, unless population control measures are adopted, the problem of price rise and unemployment is unlikely to be fully resolved.
The Role of the Modi Government
The Indian government, led by Prime Minister Narendra Modi, has faced significant criticism for its economic policies. Many argue that the Modi government is directly responsible for the high price hikes and high levels of unemployment in the country. Critics point to specific events, such as the government's directive to remove roadside eateries (dhabas) from national highways, resulting in the unemployment of approximately 4 crores of people. This action, while controversial, underscores the government's perceived heavy-handedness in certain economic reforms.
The Perspective of the Opposition
Supporters of the government argue that the price hikes are justified by various economic factors. For instance, the issue of petroleum imports and foreign liabilities has been a major topic of discussion. When petro bonds were issued, the government maintained that the people were happy with immediate solutions, such as traditional delicacies like laddoo, jalebi, and macher jhol, which did not require long-term financial planning. Additionally, the government points out that it has taken steps to redeem past debts, such as those related to Iran during U.S. sanctions, and has implemented sustainable energy solutions like solar energy on trains and bio-diesel production.
The argument posits that high petroleum prices act as a necessary restraint on unnecessary consumption, promoting more efficient use of oil and encouraging the development of alternative energy sources. The government is also actively working on projects such as the KisenGanga Dam to harness hydro-power and reduce the country's trade deficit and reliance on foreign oil imports.
Conclusion
The debate over who is truly responsible for the price hikes in India is complex and multifaceted. While the Modi government faces criticism for certain economic policies that may have contributed to unemployment and inflation, the opposition presents a different view, emphasizing the need for immediate solutions and sustainable long-term alternatives. The ultimate responsibility may lie in a combination of global economic factors, government policies, and the decisions of individual consumers.
As we move forward, it is crucial to consider a balanced perspective that acknowledges the interplay of various factors contributing to the economic situation in India. Only through informed discussions and well-rounded policies can we hope to address the challenges of price hikes and economic stability.