It's imperative for Modi govt to rein in galloping prices and inflation to ease the burden of suffering masses
The Wholesale Price Index based inflation rose to the highest in the present series that begun in 2011-12 to 14.23 per cent in November 2021; simply put, it is at a 12 year high
The Wholesale Price Index based inflation rose to the highest in the present series that begun in 2011-12 to 14.23 per cent in November 2021; simply put, it is at a 12 year high. The figures are even highest since April 2005 if we compare it to the older price series.
All these are indicative of both the price and inflation going beyond the control of Modi government or it has willingly allowed it to happen for the benefit of a certain group of people, though it could prove to be spine breaking for common people who have lost their jobs and the means of survival.
The Centre has just released the data for the last month which topped the figure of October which was 12.54 per cent at five months high. The reason of such a high inflationary pressure was primarily due to rising prices of manufactured goods and food in the wholesale apart from soaring prices of mineral oil, basic metals, crude petroleum and natural gas, chemicals and chemical products and food products etc.
All these means that the input costs at production level has risen to this level that has increased the price at the wholesale level, which will ultimately be transferred to the retail levels, that is, to the consumers.
The consumers have already been paying unbearable prices for goods for the last several months. For the last eight consecutive months the WPI inflation continued in double digit, putting extra pressure on market prices.
Let us not forget that we are talking about wholesale price of goods and inflation since the WPI does not include services. Services are included in Consumer Price Index (CPI) and is calculated on the basis of actual price paid by consumers for a basket of both goods and services.
It is precisely due to this reason that the data on WPI inflation released yesterday and the CPI inflation released earlier show a great difference. While WPI inflation was at 14.23 per cent, the CPI inflation was 4.91 per cent.
It was on the basis of this CPI, which actually conceals the inflationary pressure on goods and the level of their high prices in the market, that Modi government has claimed that inflation is under control and within the targeted RBI limit of 4 plus minus 2. The RBI plus minus 2 range on the base of 4 is too wide on the one hand, and misuse and manipulation of cost of the services to veil the actual price rise of goods and inflationary pressure on them is shameful for the government and that too to present a rosy picture on CPI inflation.
The wide gap between the WPI and the CPI inflation also indicates that our producers are greatly struggling to absorb the high input costs while keeping their market intact on account of the price rise at consumers' end.
Let it be so; Modi government seems now to be exposed. Inflationary pressures are here to stay now, since the situation has gone beyond the control of the Centre and the RBI can have only a limited role. Both the WPI and CPI inflation are set to rise due to domestic and international market conditions on the one hand and the wrong priorities and policies of the Modi government on the other.
The data released by the Ministry of Commerce and Industry reveals that the wholesale fuel and power prices rose 39.81 per cent in November on year on year basis as against 37.18 per cent in October, while manufactured product prices rose by 11.92 per cent against 12.04 per cent in the wholesale. The wholesale prices of food also accelerated at the rate of 6.7 per cent in November on a yearly basis while only a month ago in October, it was only 3.06 per cent.
This should be a serious matter of concern because such record-breaking inflation on WPI has come at a time when the Indian economy has just started recovering from the devastating impact from the COVID-19 pandemic, lockdowns, and containment measures. People have little resources left with them for survival with very bad scenarios in the job market.
Another cause of concern is that these months are a busy season of the economy and a time when new crops and vegetables come in the market in surplus. It is indeed a bad omen for the country that prices of food items and manufacturing products should reach so high with the biggest inflationary pressure in the last twelve years.
It has also been revealed that WPI crude petroleum inflation was 91.74 per cent in November as against 80.57 per cent in October. Since any relief on the fuel front does not seem likely coming our way, we may well be heading towards even more difficult situations. Uncertainties due to supply chain disruptions are to remain on account of Omicron and other future variants of the COVID-19 virus.
India, therefore, is in urgent need of taking the issues of price rise and inflation to save the common people, especially the poor 60 per cent of the population who cannot even afford two square meals, what to talk about healthy food. The pandemic of malnutrition may put additional pressure on our healthcare system which is already under great strain due to the pandemic and other non-communicable diseases.
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