Will price rise hurt the poll prospects of the UPA in 2014 general elections? There are very few precedents when a ruling government’s prospects were overwhelmed by inflation in India’s political history. But, there can hardly be a dispute that inflation majorly fuels and exacerbates anti-incumbency like it did against the BJP government in Delhi in 1998. SheilaDikshit’s victory was the result of, among other issues, the high prices of onions in that year.
Despite getting its way on the food security bill, the UPA is hardly in a comfort zone. And the likelihood of soaring retail prices of cereals, vegetables, pulses and fuel taking a toll on the ruling regime is high. Odds are high against the Congress-led coalition with most opinion surveys till date indicating simmering voter angst in both rural and urban areas over price rise.
Voter disenchantment has peaked further as the economic situation has worsened under the watch of an economist prime minister. The overwhelming perception seems to be that theManmohan regime has squandered gains made from last decade’s India growth story.
With the opposition leaving no stone unturned to shift focus on economic mismanagement,the anxiety is palpable within the ruling ranks. Sanjay Nirupam, Congress MP from North Mumbai Lok Sabha constituency, was candid in accepting that the issue is hurting the party on Zee Media’s Bharat Bhagya Vidhata (#BBV).
High food inflation, which has hovered in double digits for the last five years, is gnawing the government ahead of assembly polls in four states viz Delhi, Rajasthan, Madhya Pradesh and Chhattisgarh later this year and the 2014 Lok Sabha elections. Blend food inflation with corruption, policy drift and poor leadership, and it can become a deadly cocktail for the ruling coalition. Add to that, the sub-par 5% jobless growth, a high current account deficit and sliding rupee.
Speaking on Zee Media’s #BBV, former Rajya Sabha deputy chairperson and senior BJP leader Najma Heptullah openly said that her party will make it an election issue and aim tochannelize the simmering popular discontent against the government. Earlier, former finance minister, Yashwant Sinha had blamed the inept government policies for high inflation whose impact is being felt far and wide.
In fact, Sinha is bang on dot. Under the UPA, the retails prices of essential commodities such as tea (158%), sugar (157%), milk (129%) and petrol (115) have shot up manifold. Nowhere is it more visible than in pulses market where a record output in 2012-13 hasn’t brought down the prices. All pulses except chana (Gram) have become costlier by 15 to 38 per cent over the past year.
Experts appearing on Zee Media’s Bharat Bhagya Vidhata in “Price India Pays” show wereunanimous that the country’s inflation woes are due to lack of supply-chain reforms. Inadequate storage chains, limited means of government intervention and under-developed market mechanisms have exacerbated the problem. What further impinges the fight against inflation is that the real inflationary picture hardly gets reflected in the government data.Wholesale Price Index (WPI) is not relevant for consumers as people don’t buy products at the wholesale level.
Inflation hasn’t been an independent issue in India before 2000. Between 1947 and 2000, prices rose in double digits only 21% of the time, that too, mainly during the oil shocks of the 1970s. That did affect few regimes in states and the stability of the Centre. One possible reason could be due to licence control raj and socialist policies of the pre-1991 era.Besides, development and economic growth have come to dominate elections very recently. Unlike US where parties talk about mundane economic issues but in a much vigorous fashion, Indian political issues still centre on caste, creed and graft. They lack informed debates on issues that affect a common man on the street.