Prices, People and Politics

Home Minister P Chidambaram makes sense when he laments consumers’ behaviour pattern vis-à-vis inflation and economic growth in the country. It is now a known thing and also a submission from the government that it suffers from policy paralysis, and that it is waiting for Congress’s next generation leader, Rahul Gandhi to stop playing cameos but to lead from the front. In short, the UPA led by the Congress admits that the hour has come, but the man is yet to arrive. This would a unique situation when time, which is known to have waited for none, is waiting for Congress’s saviour.

In the meanwhile, the UPA continues to battle its own agonies complicated by people’s frustration owing various factors albeit dominated by the almost ever rising prices of all commodities of daily purchase, and the leaders of UPA continue to throw some light on the reasons for this hapless condition prevailing in the country. For most of the things going wrong, the UPA blames not itself but some other element, many a time irrationally, though. But, on Tuesday, P Chidamaram seemed to make a valid point when he pointed finger at people’s spending pattern. He quipped that while people are ready to spend Rs 15 for a 300ml cold drink bottle and Rs 20 for an ice-cream cone, they are outraged at spending Re 1 extra on rice or wheat if it means some cushion to millions of farmers across the country.

There are three definite aspects of inflation-people-government axis. Let’s first take the case of prices. Prices are on the rise for past few years. In fact, when UPA went into 2004 general elections, rising inflation was one of the prime election issues. But, people defeated that issue and made price-rise a non-election issue. However, political tempers on price rise kept rising. Prices are rising due to simple reasons, both external and internal. To begin with government’s argument, which reflected in P Chidambaram’s latest statement as well, that procurement prices for most of the food-grains have been increased pushing the prices at consumers’ end higher. But, procurement prices were increased not for the concern for the farmers but to score some political brownie points. Whatever may the case be, it resulted in some relief to farmers, but some additional burden on the consumers.

Another important reason for price rise is, manipulation by medium and big market players. Hoarding is still rampant across the country. Sadly, gone are the days when even Bollywood films produced angry young men fighting against hoarding and kalabazari. This makes a cabbage or a cauliflower available throughout the year, but at an elevated price, which does not fall even during its flowering season. But, none seems to spare a thought for this aspect of price rise.

Third important reason for rising inflation is gloomy world economy complimented by the fluctuating but rising crude oil prices. This has put a huge burden on the macro-economics of the government of India which is much concerned with managing fiscal deficit and keeping good vertical growth figures. In the nutshell, the situation has come to the point where the governance is a failure under the UPA regime. Policy paralysis is both now the cause and result of this hapless situation.

Second aspect of the axis is people’s behaviour. People, rather voters, have shown in past few years that price rise is not an issue for them. We may deny, but can’t denounce this evidence of India’s democracy. Here comes the relevance of P Chidambaram’s statement on consumers’ behaviour pattern. His astonishment is valid when he wonders why people are ready to pay Rs 15-20 on something that is not going to affect quality of his life. This shows that those who have are not really bothered about spending money on things of their choice. But, somehow a mindset has emerged on the national scene which demands and argues that all the life sustaining essentials should be almost free of cost. Buying a kg of potatoes with Rs 15 looks a costly purchase but spending Rs 35-75 on a burger is nothing. This leads us to the third aspect of the inflation-people-government axis, politics.

Prices are here to stay. The last decade has proven this beyond any iota of doubt. In fact, the increased prices are the new bases for family expenditure. But, politicians think it fit to keep the anti-price psyche in the top-most quarters of priorities. This is coupled with news-starved news media, which harps on flying prices. Somehow things have come to such a passe that everyone the same tune but none is listening, not even the singer.