Soaring inflation in India becoming major worry in most households

Ashita Goel

The Indian economy is currently experiencing significant underlying inflation, necessitating urgent policy tightening by the Government.

Prices are growing at a time when work possibilities, livelihoods, and incomes are dwindling. This is because of the US inflation rates and global trends which have resulted in the increase in domestic prices through dependency on the imported goods and services.  As the rupee continues to fall against the US dollar, the Reserve Bank of India had new inflation concerns. This sudden depreciation led to the increase in prices of regularly used commodities and crude oil. Also, the unanticipated second Covid wave contributed to a substantial error in the banks’ inflation forecasts.

Furthermore, central banks have pushed in a large amount of cash to get through the uncertainty of lockdowns and pandemic. As the number of cases and deaths rose during Covid, the Government was obliged to implement curfews, lockdowns, and other restrictions. As a result of imposing sudden restrictions and limitations, the supply chain movement disrupted, implying a hike in prices.

According to recent estimates from a survey performed by the Centre for Monitoring Indian Economy, 17 percent of households in 2020-21 had an average monthly income of barely Rs. 8,600. Around 62 percent of households had a monthly income of less than Rs. 14,400. Therefore, we can relate that the impact of rising prices of critical commodities on people with such limited income is disastrous.

Can we even imagine that the price of a 14.2 kg cooking gas cylinder has risen by roughly Rs. 480 to over Rs. 1,000 per cylinder in just one year? Is this the Ujjwala scheme, our government talks about! The more shocking fact is that this government has stopped subsidising gas cylinders for the past two years targeting the tribal and scheduled caste communities. The subsidy for providing gas cylinders to tribal households was reduced from 1,064 crore to barely 172 crores in the Special Tribal Component (STC) of the budget 2022-2023. Who can afford the LPG cylinders at such a hiked price?

It would be correct to claim that price inflation has caused the wealthiest to earn more revenue while the poor have become poorer. 

In a voxpop, Vijay, a launderer said, “Due to the increase in prices, I am not able to save the money; the 100-200 rupees wage is utilised in covering all the regular expenses. Earlier, the fees which were 200 rupees are now 500, leading to no money in my hands.” A canteen worker named Ankit claimed that price inflation is affecting the employment status of the country. Similarly, many people like Vijay and Ankit shared their viewpoints and ideologies on price inflation.

It’s high time that our Government takes measures in order to control the inflation in the country. Otherwise, the day is not far when India will also suffer from an economic crisis like the neighbouring country – Sri Lanka.