Price hike alarms the poor: ‘How will we survive?’

Kakali Das

There has been a frail argument by a few regarding the price hike of diesel and petrol – that it’s about being environmentally conscious, and wanting fewer people to take their cars out, and that only the rich are likely to be affected by it etc. It’s an evidently weak argument considering how it can be rebutted. But, when the price of LPG, which is a cooking gas, skyrockets, none of these argument hold, because cooking gas or LPG isn’t environmentally hazardous, it has the least smoke and pollutants emitting out. It is only used by homes to cook food for families. And, to price it at Rs860 a cylinderat a time when employment and livelihoods have collapsed, and there is no subsidy is grossly inhumane. To the uninformed, the LPGsubsidy on domestic cylinders has been completely erased for over a year by constantly increasing the prices and bringing it on power with market rates. For a family of 6 or more, two cylinders a month is normally required when a lot of families boil water to drink, heat water for baths on their gas. In this year, since January until now, the prices have gone up a Rs165. In November 2020, the price of LPG per cylinder was about Rs560, and today, it is Rs860, which is a price unthinkable. What is the justification by the government for this type of movement?

There used to be a time when the price of LPG cylinders was enough to bring down the government in Delhi, when the BJP was in opposition. Have Indians now become so wealthy that we can afford Rs860 for a cylinder? An eminent economist, Prof Santosh Mehrotra, by using the government data,showed that since 2013, poverty has been increased, the share of population below the poverty line has been increased, the absolute number of the poor has increased the poverty line, and that this had never happened before in the history of estimation of poverty in our country. So, our great government has actually presided over the increase in poverty which had never transpired since the estimation of poverty. So, where is the logic forthe rise of the price of petrol, diesel and gas cylinders, especially by the government which have tried to universalize the use of gas in the rural areas? Why to give with one hand and take way with the other?

What’s further shocking is that the prices of oil and the important gases are nowhere close now to what they were 6 years ago when this government came to power. The market prices have now fallen dramatically, but this government goes on rising prices wherever there are possibilities of it.

Upon asking the reason for this inflation at a time when livelihoods are at stake, Santosh Mehrotra, Economist said, “The reason, basically, is uncomplicated; inflation is the easiest and simplest way of collecting revenue by the government when the economy has been contracting. Of course, we will be told how well our economy is recovering and etc., but the fact is that whatever the recovery is, it isthe rebound from the periodic lockdowns. Besides, there has been a K-shaped rebound, meaning those who are poor have become poorer, rich have become ricer; making of profits by the listed companies in a manner that have never been made in seven years is one reason among others why the stock market is booming. The gap between the rich and the poor have become unimaginably wider to leap in this birth.”

Two very senior individuals who run massive companies in India, in an interview, talked about these large companies which have been making a ton of money for two years by cutting costs, travels, notproviding perks to their employees, downsizing their offices, and letting go off people. It is the small businesses, the small families who run little shops that have suffered immensely and are in deep trouble.

India is presiding over the BRICS this year.As per the RBI bulletin data, every BRIC country have inflation rates which are lower than ours, and India is the one BRIC country with the largest number of poor in the worldwhose numbers have increased. The government is further impoverishing the country by increasing prices all across it.

On being asked what the status of the free gas scheme, the Pradhan Mantri Ujjwala Yojana (PMUY) is, if the women are still receiving free LPG gas or are they too spending Rs860 per gas cylinder, Chandra Prakash, President, All India LPG Distributors Federation said, “The Ujjwala Yojana 2.0 which was launched on 10th August 2021, the distribution of 1 crore new Ujjwala connection has started under this scheme. But once the first threefree gas cylindersrun out, every beneficiary has to pay Rs860 per refill after that. Only the first three gas cylinders are free for all who sign up under the Yojana.”

We appreciate the fact that the government under the Pradhan Mantri Ujjwala Yojana have decided to give three free gas cylinders and we appreciate the fact that it has been done in order to ‘save them from starving,’ but what happens after these three gas cylinders have run out? Do people starve then? Do they go back to burning wood? Who do these people now go to when those three gas cylinders have run out? How help of such an intensity which, the government has been saying, is so critical can only be forwarded for three months?

How many families can afford Rs860 per cylinder as a refill in this country? The average monthly income across the country per capita, according to the Rangarajan Committee report, is a little over Rs3,000 a month in the rural areas. In an article that was published in The Hindu, it was estimated that prior to Covid-19, the average monthly income in rural India was Rs3,250, and it plummeted to Rs2,700 post Covid-19. Similarly, in urban India, it was Rs6,400 and Rs5,400 before and after Covid-19 respectively. Now, for an instance, let’s assume that there is a family which is earning Rs5,000 a month post Covid-19. How on earth can they spend Rs1720 out of that very income on two gas cylinders to cook their food on? If they don’t buy gas cylinders how will they prepare their food? Especially, if we consider the target audience for the Ujjwala Yojana, these are exactly the kind of people who wouldn’t be able to afford the gas cylinder worth such a hefty amount. But we know, somehow, that the rural India, at the end of the day, will put the Ujjwala Yojana gas cylinder aside, andgo back to burning wood or dried cakes of cow dung to cook their food on, but how will the urban India survive?

The finance minister, Nirmala Sitharaman recently said that the price of fuel is just being kept high by the government because it is servicing the loans taken by the UPA on oil bonds. The oil bonds that the government needs to pay back were taken to the tune of Rs1.3 lakh crore, and based on the union budget, the government is only planning on paying the interest on this amount. But what’s astonishing is the fact that over the last financial year which ended in March 2021, the government collected Rs3.7 lakh crore only on tax on fuel (let alone the tax on other stuff), meaning the government is fully within its ability to pay off these loans and still have twice as much left over. So, the finance minister’s argument here is inaccurate and misleading. What is this government actually using the money for? Why can’t the money be used, for example, to continue to give free cylinders to the Ujjwala Yojana beneficiaries? We haven’t been given any clear answer by either the Minister of Petroleum, or the Minister of Finance up till now.

If the government argues that the rich can afford paying the rising prices, thenplace the wealth tax on the rich who are making more than Rs10 crore a year. But to say that the government has no choice but to increase the price of LPG, diesel, petrol at a time when we know people are starving across the country is pathetic. What has prevented this government to have imposed, in this budget of February, a specific surcharge on those who have incomes of over a certain crore per annum? There was nothing holding them back from putting a specific Covid-19 surcharge temporarily needed for the government to collect revenues and enable these subsidies to be continued. Who is preventing the government to slightly raise the corporate tax which it had reduced by five percentage point from 25% to 30% in one go in 2019? What is preventing the government from reinstating the wealth tax?

“The very fact that the people whose assets and net worth have grown multiple folds are the ones who are buying their electoral bonds, is what is preventing the government from imposing the wealth tax on the wealthy, and ‘mysteriously’ only the minister of finance knows who they are,” Prof. Mehrotra further said.

Lastly, I would urge and strongly recommend, as readers, and as people who have access to information that you read more about how the government is using our resources. Every single rupee that is being spent on the central vista project is our money that we earn, it gets cut off of our income that we pay tax on. Shouldn’t it be used more responsibly? And, are we really being responsible? What future are we building for this new India if our children are starving across the country, aren’t going to school etc.? And, for those of you who believe that you are at the top of the pyramid, and you will reap benefits from all of the giganticcompanies that are soaring up high in the stock market, remember, that if the bottom collapses – the bottom that actually buys the product that the companies produce – the whole system, however massive it is, will collapse with it. Nobody will make money, or be rich if we don’t look after the poor.

To the government – It’s your responsibility to ensure that children don’t starve in this country; the people of the country are your responsibility, and not the private organisations that you’re being a slave of. It is that very responsibility that you have abdicated, and there has to be an accountability for it.

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