Sarad Damodaran: The standard of living of Indians has considerably changed after 50 years of the country's independence? But the living standard is not the same for all citizens of our country! today also there are crores of people who are living under poverty who cannot afford even two square meals a day. Increase in the cost of articles may not make all the people sad. For example, rise in the cost of petrol would not affect the poor people's lives because they may be using cycles. But for the middle class people the situation may become terrible; in the same way the rise in the cost of food items by Rs 10 would not cause a lot to rich people but for the poor the situation would become extremely dreadful.
We call India to be a country with unity in diversity, because here other than caste and religion, there is a huge gap between the rich and the poor, due to which rich are becoming richer and poor, are becoming poorer, day by day. Although inflation meant a lot of terror for us but only UPA could not be blamed for soaring inflation because our country was not only governed by UPA but also by many other parties such as BJP and BSP and the endless list have been the part of our govt. Even though we call our government to be the most democratic one in the world.
No one could avoid me from saying that it is the most corrupted form of govt because more than 50% people are in opposite side. Today our culture no longer survives and the western culture has caught the neck of our culture and everyone seems to be modernized. But, we are not aware that we are losing our good values in the cultures. 70% of our population is below the poverty line. People of our country are responsible for the rise in prices of essential items. Inflation results from commodities becoming scarce.
Pranjal
Srivastava: Since the last 2-3 years the prices of
important consumer products have gone up leading to problems
for the common people. Our government has tried to keep
the prices of consumer products by removing some kind of
duties and taxes. The important factor is that the prices
of many products of daily use have crossed all the limits.
Simultaneously our finance minister took several steps to
solve this major problem but none of his solutions worked
effectively.
Not only our government is responsible for soaring inflation, other factors like the population of our country and the rate of products in the international market are also responsible for increase in prices. To solve this problem, the production of grains should be increased, there should be improvement in the irrigation facilities and unless and until there would be sufficient storage of grains, prices cannot come under control.
Gokul
Prasad Bhatt: Certainly not; the UPA government is not
responsible for soaring of inflation in the country. Most
of the countries of the world are facing the problem. There
is acute shortage of foodgrains all over the world. The
prices of foodgrains and eatable oils are soaring high.
The global warming, the uncertainty of climate has affected
the agriculture produce. The hailstorm along with heavy
rain has done a great loss to the agriculture produce.
The Central government did its best to improve the conditions of the farmers by exempting payment of the agricultural loans worth Rs 60,000 crore and making a provision of new cheap loans. To control the prices of the foodgrains, the government has taken off the import tax on foodstuffs and pulses etc. The government is taking every possible step to control the prices of foodstuffs and other necessities. The result is visible.
The prices of all foodstuffs, eatable oils are coming down. In a few days it is expected that prices will be normal. It is not proper to hold the UPA government responsible for soaring of inflation. We are thankful to the government for its timely steps taken to control the situation.
AB
Mehta: Any government in power is responsible for the
state of the nation. In a federal set up the wider policies
are defined by the Central Govt while its implementation
is done by states. Unfortunately there is a tendency to
take credit when things go well and pass on the buck to
each other when the results on the ground are unsatisfactory.
Many such situations are the result of a number of factors
and it is not easy to pinpoint all the causes or blame a
single agency for it.
Controlling inflation in a developing economy is a game of balancing contradictory factors. While growth in economy is a must, price control is equally important, particularly for items of daily use. Although it is the poor and daily wage earners who are most affected, it is the middle class that is vocal about it. As many political writers have said, middle class is the most selfish class.
They want all the facilities, increase in remuneration and comforts, but they would not like to part with more money to compensate the producers of goods, particularly vegetables and cereals. When he is made to produce more you want to buy his produce at a cost that is not even remunerative to him. When the demand is more than supply and he wants to make some extra profit as insurance for the future, we say it is exploitation. Political parties are either in power or in opposition. If in power they would like to take all the credit and if in opposition they would criticize each and every action of the party in power whether in Centre or in states. Some do give suggestions but these usually cannot be easily implemented in the given situation. Those, who had been in power earlier, would never accept any deficiencies in action when they were in power.
The armchair economist is primarily concerned with statistics like GDP, Inflation Index, Sensex, FE balance etc. The price of crude and gold in western market and $ to Rupee ratio are more important to them then the cost of potato in the market. However when we talk of governance it is this contradiction that a government in power has to handle and take appropriate actions.
Omprakash
Kharwal: At present, inflation is at its new peak of
7.41 per cent. Prices of edible oil have gone up to 62 per
cent in last 3 years. UPA govt has totally failed to check
it. Govt says that prices of consumer goods are going up
due to hike in prices of petroleum products, decreasing
agricultural produce in the international market. UPA Govt
is worried as assembly elections in Karnataka, MP, Rajsthan
will come soon. Later, general elections will be held in
2009. The increase in the prices of daily use items have
affected the common man most. They are not able to manage
two square meals a day. It may be noted that in our country
84 crore people are living on Rs 20 per day.
The UPA government is not totally responsible for soaring inflation. But it has to take corrective measures in time to check the prices going beyond a limit. The govt wants India to become an economic superpower and for that we will have to control inflation by boosting up agricultural production and restricting imports of wheat, pulses, palm oil. Thus in my view the UPA Govt should work out strategy to overcome the present imbroglio.
Dr
Balak Ram Kashyap: It is not correct to hold UPA Govt
alone responsible for soaring inflation. As a matter of
fact inflation cannot but remain far behind when prices
of essential commodities are sky rocketing. The upward trend
between the two is sympathetic. As for the price rise, it
may be mentioned that even though the rise in prices has
been phenomenal yet all the blame for that unseemly situation
cannot be apportioned to UPA Govt alone. Were the prices
not increasing when UPA Govt was not at the helm of affairs?
Did they remain stable or came down when BJP was administering
the affairs of the country. Rising prices and even inflation
is almost a continuous process depending upon factors like
market conditions, prices in the international market, geographical
conditions, appurtenant social and economic environment
besides Govt's price/market control mechanism and its apathy
or inactivity.
Prices of petroleum and petroleum products are governed by international market conditions. This holds good of the importables also. As for the agricultural products constituting the bulk of our food items they are mosly affected by inclement weather conditions like excess or no rainfall, intense heat or cold conditions. The year just passed witnessed these conditions as a result of which standing crops on several lakh acres of land was destroyed dooming the farmers and shooting up the food prices beyond all proportions. The Govt also did not exhibit appreciable vigilance on the food front.
However, even the belated action of UPA Govt to check price rise has had its effect and prices of certain edibles registered a downward trend. In sympathy with rising prices the inflation also soared up. Noticeable downtrend in prices is likely to help ease the inflationary pressures too. Together with any steps designed to check price rise and inflation corrupt practices like black-marketing, hoarding and profiteering need to be crushed .
Syed
Zia Ul Hasan Naqvi: While prices of all essential commodities
were rising continuously since last few months our government
was sleepily yawning and did not take appropriate measures
for controlling the prices. The present inflation rate which
has gone up to seven per cent is the result of negligence
on the part of UPA government. When all the strings of administration
are in the hands of government then naturally beyond any
doubt it will be held liable for the food prices which are
soaring high up in the sky. Inflation is due to corruption
in the society, extra ordinary expenses by the government;
increase in taxes on public, government has not cracked
down on hoarders and due to Demand-supply mismatch, not
judicious use of technology.
And above all wrong policies of government. Now when there is acceleration in inflation government is in panic due to coming elections and taking anti-inflationary measures in haste. Government has banned the export of wheat, maize and pulses, it has also abolished import duties on crude edible oil. Apart from this government is taking other measures also. For checking inflation a slew of policy measures are essential so that inflation could be controlled effectively.
Sushmita
Shrivastava: No, the UPA government is not responsible
for soaring inflation but it can take measures to check
it.
In spite of very popular budget and bonanza for government employees, UPA government is trying hard to save its face for spiraling inflation. It is a big worry for the government because there are many state elections scheduled this year and the government has to face general election next year. The aim of government was to present itself as a helper of the common man by waiving of loans of the farmers. Annual budget 2008-2009 is called 'Aam admi ka budget' (budget for the common man).
But this inflation rate has put government on backfoot. Regularly hiking prices of food and commodities have increased inflation rate. Inflation rate is based on wholesale price of commodity, but actual retail price is much higher than this. This is very painful for common man and government may pay for this in upcoming elections. Hiking price of some essential commodities like food, oil and metal items are main concern for common man. Government can control inflation. It has option to increase the supply of products in the market. It can cut taxes, reduce duty and levies to control inflation.
RJ
Khurana: No, it is not though the opposition has already
unsheathed its swords to attack the UPA government on the
issue. Inflation comes in many varieties. The worst variety,
from the viewpoint of people and the politicians, is the
food-led inflation, which India is presently experiencing.
Here in India where half or more of family spending is on
food, rising food prices can spell electoral doom. However,
it is not India alone that is in the grip of inflation.
It is a global phenomenon. More than 30 countries of the
world are grappling with food-led inflationary spiral. They
have sought to import more food items.
In consequence the world price of rice in the last six months has shot up by 60%, wheat by 40%, and soybean oil by 40%. Simply put, there is more demand for food items than the supply. Two successive wheat crops failed in Australia. USA has diverted significant portions of maize growing area to ethanol. In sheer panic, several wheat and rice exporting countries like Uzbekistan, Russia, Argentina (all wheat surplus countries) and Thailand (rice) have banned exports of food items from their countries. In India government panic on inflationary spiral has led the farmers and traders to hoard.
Hike in petroleum products has worsened the situation. Since 1989-90, the area under food crops has also shrunk. Rapid urbanization has badly hit agriculture with over 6% of cultivable land going under urbanization. Hopefully, with the expected rise in world and Indian food production combined with a judicious anti-inflationary policies including streamlining of PDS initiated by the government, the present inflationary spiral should cool down. If it doesn't the UPA is doomed.
Subhash
C Agrawal: With pre-elections freebies regularly pouring
in, inflation is set to form new records which may even
go up after general elections are held next year. Congress
or UPA are not the only responsible political groups. Similar
or even worsened situation would have been there even if
BJP or NDA would have been in power, because in India requirement
of vote-bank politics dominate government-budgets and fiscal
policies rather than economic requirements.
With political community in India generally belonging to super-rich category, political rulers of any party/alliance can never be practically sensitive to ill-effects of inflation born by commoners. Widening gap between rich and poor in present era of free economy may even cause social unrest in time to come.
Krishna
Chander Mouli: It would not be correct to hold any government
of the day alone responsible for any economic boom or a
recession. In the case of soaring inflation too the same
logic applies.
The argument is that both the price rise and inflation are as a result of the influence of many tangible and intangible economic factors. These factors can be national and international too. In today's globalised open economy steep fluctuations in the price indices is not only natural but also unforeseen.
Thus accusing any one government at the Centre or state could at the most be a political crusade -specially by the opposition. The same or a worse situation must have been prevalent during to-day's opposition party's government earlier. Yet in a democracy the opposition has every right and privilege to accuse the present-day ruling political establishment without any introspection into what was the scenario during their regime.
In a country where steep price rise in as an unimportant as the onion market could cause the downfall of a government, the very high inflation rise should be a matter of serious concern for the government because they could be pulled down for their inability to contain inflation since what people understand and are convinced of is the availability of their daily needs at reasonably cheaper prices--not the economics.
Curbing the inflation should naturally be the top most priority of any government. This is not to justify in any manner the allegedly ill-conceived and lopsided economic policies of UPA government without anticipating the inflationary factors that may cripple Nation's demand, supply, stock, price position etc. But in a given situation like this any govt could only have to face it and initiate appropriate measures to contain inflation and demand-supply position in the market.
Since all the measures initiated by the UPA (union govt) under the various provisions of the relevant Acts are executed by the State agencies through the Collector, the state governments irrespective of their party identification and ideology must act in close coordination with the Union Govt in tackling the situation relegating the political expediencies to the back burner. No blame game could ever tackle inflationary tendencies.
RK
Kutty: Blaming the UPA government for soaring inflation
is unreasonable/un-justifiable, as the current soaring inflation
is caused by a variety of other factors as well which the
poll-savvy politicians and parties deliberately want to
ignore. For example, is the UPA responsible for the unprecedented
price rise in crude oil in international market? Also, is
the UPA responsible for the un-seasonal rains in different
parts of the country viz the rain that lashed over Kerala
by end of March (the summer rain) that destroyed paddy crops
worth 2000 crores of rupees? Of course, the government wakes
up to the reality of sudden spurt in prices, immediately
after the farmer loan waiver bonanza and then the announcement
of the 6th pay commission report thereby announcing hefty
pay hikes to central government employees.
In fact, the government could have taken precautions, knowing fully well the mood of opposition parties like the NDA, the Leftists, the UNPA and others who were very much after the UPA government when they draw more near to the impending State Assembly polls in a couple of North Indian States by end of November 2008 and then the general election in late 2009. The UPA should have known the ground reality that the agricultural production was on a slump and was not matching with the demand when people have enough purchasing capacity. In a nut-shell, what inflation is too much money chasing too little things. We should have stopped exporting food commodities when we were particularly flooded with enough foreign exchange reserves.
The enemy of the current UPA government is much within them than outside. The UPA partners like the NCP, DMK are opportunists who are now desperately looking for the right time to disembark from the UPA boat. Then, the UNPA led by Mulayam-Amar duo is desperate to rope in the Leftists so as to form the 'Third Front' and are creating problem for the UPA. Unfortunately, the Indian Agriculture Minister is keeping the option open for import of food products but the harsh reality is that it would cost more to the exchequer as the prices of food products in international market are just double.
Hence, the UPA managers have wisely taken the decision of cutting exports and also put brakes on future trades, the concept that contributes more to inflation.
Dr
Visal A Khan: Confluence of factors of Inflation that
hit 11-year high of 7.1 percent in January, is ramping up
the costs of doing business in China, with potential knock-on
effects for the rest of the world. China's currency has
strengthened sharply against the dollar. China's inflation
is having a domino effect on worldwide inflation. India
has limited resources and sudden natural calamities of storms,
earthquakes, floods, drought in continuous years made worse
the case as products moved up the value chain from toys
and clothes to cars and high-tech machinery. The production
suffering every year and in the reserve population increases
higher and higher. Our research scholars are based on the
research work of China, Japan and USA, their individual
work is biased and they have become now slaves of foreign
innovations. Wang Qing, chief China economist at Morgan
Stanley, stressed that Chinese competitiveness was not about
to disappear and goods from Asia's most populous nation
would remain cheap for years.
I don't think the days of cheap Chinese goods are over. The inflation that China is experiencing now has a cyclical component. By that I mean the high inflation won't be sustainable. In the past, (outside) inflation pressures in the US mainly came from oil prices because the US economy is highly dependent on crude oil. Cheap products from China and other developing countries helped to alleviate that pressure but that reflected India's inflation to a great extent. Nevertheless, while it is clear that doing business in China is getting more expensive, there is no consensus among economists about how much that will translate into higher price tags for Chinese-made products overseas. Companies intent on paying bottom dollar for their products could move operations to nations with cheaper overhead costs, such as Vietnam, Sri Lanka or Cambodia. Aside from cutting their own margins, factories and traders can first look to their clients, many of whom charge huge mark-ups on the wholesale price, to take on more of the financial burden. What's more important is that you should not just focus on nominal wage growth, you also need to pay attention to labour productivity growth. That's why I think we shouldn't be too alarmed about this. We cannot make responsible of inflation in India to either centre or state, it is the reflection of worldwide soaring inflation and it is neither UPA government nor state Government's responsibility for soaring inflation.
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