Inflation and weather both heavy on Indian people

In India, both the heat and the inflation rate are increasing, with the worst effect on the poor and middle class.  In contrast, the rich don’t mind because their houses are air conditioned and have money in their pockets.  According to the data of the Ministry of Statistics and Program Implementation, Government of India, there has been an unprecedented increase in the consumer price index based retail inflation since the year 2014 to 7.79 percent in the month of April.  Similarly, according to the Meteorological Department, India’s monthly and daily highest temperatures rose to 31.35 and 35.30 degrees centigrade respectively last month.  This is a double and horrific hit on the poor, which will further weaken them.  Maybe nature may still have mercy and give some relief to the poor from the havoc of the heat through the south-west monsoon, but it seems that for the last few years, the prices of common goods and inflation for the 500 million poor sections of India are rising.  It has become a new trend everyday.
According to the Oxford Poverty and Human Development Initiative (OPHI) and the United Nations Development Program’s Multi-Dimensional Index-2021, about 22.5 percent of the people in India are extremely poor and live on less than $2 a day and need some way of sustaining their existence.  are striving.  Further, the reality is that multidimensional poverty is more prevalent in their health, education and livelihood than this income based poverty shown in the data.  Over the years, due to the COVID-19 pandemic, unemployment and high inflation, a large number of Indians have fallen into the net of absolute poverty.  Retail and wholesale inflation, measured on the basis of the Consumer Price Index, has risen steadily over the past few months.  This year, the consumer price index reached 7.79 percent in January (6.01), in February (6.07), in March (6.95) and in April.  At the same time, according to sources in the Ministry of Commerce and Industry, the Wholesale Price Index, which was 13.68 percent in January, rose to 14.5 percent in March.  Although the Russo-Ukraine war has fueled global inflation for some time now, India’s pre-existing inflation driven by rising fuel and food prices and government efforts to stabilize prices has been in vain.
India’s rural poor are the worst hit by inflation as the consumer food price in rural areas, which was 3.94 per cent in March 2021, has gone up to 7.66 per cent in April 2022.  If we talk about food items in the Consumer Price Index, the increase in the price of edible oil and ghee was 24.7 percent, fuel oil, light transport and communication sector grew by 11 percent.  Although the price of crude oil rose to $110 a barrel in the international market, but due to the taxation of 55 percent on petrol and 50 percent on diesel by the central and state governments on the fuel in India, the domestic prices are very high.  The main reason behind higher cost of production and selling price of the commodity is high food and fuel inflation rate, which further leads to increase in wholesale inflation.
The core inflation rate, which does not include the daily fluctuations in the price of food and fuel, has crossed the official limit and monetary policies may fail to deliver quick results in these situations.  Further, monetary policies by themselves are not a guarantee to contain retail inflation unless the government reduces the prices of everyday commodities by cutting its share in fuel tax on the one hand and bringing down the price of food items through imports on the other.  In fact, monetary policy can only be successful in bringing down the wholesale price index if economic activity does not result in a reduction in retail inflation.  The hike in the repo rate from 4 per cent to 4.4 per cent by the Reserve Bank, instead of reducing the retail price, will result in a reduction in economic activity as a result of increase in the interest rate of loans taken from banks.  An increase in the repo rate will slow down India’s economic growth.
World Bank President David Malpass, in his speech titled ‘Challenge to Progress, Security and Sustainability’, said: ‘Inflation continues to rise, reducing the real income of households around the world, especially the poor.  Every one percent increase in food prices pushes a further 10 million people into extreme poverty.  The rich can bear the sudden price hike in food items but the poor cannot.  This is expected to increase malnutrition and its irreparable damage will be most likely to the health of children.
India’s nearly 500 million people are poor from socially and economically weaker sections in rural areas and living in urban slums, rising inflation rate will further drive them into extreme poverty.  Declining wages, the COVID-19 pandemic, high rural unemployment rates, income inequality and high food inflation will have far-reaching adverse effects on poverty alleviation efforts in India.  The poor, who are still in the process of recovering from the devastating impact of COVID-19, will be further adversely impacted by inflation.  The average price of diesel and petrol has increased by Rs 53 and Rs 66 respectively in the year 2015 to Rs 96 and 110 respectively in May 2022, while the price of domestic gas cylinder is Rs 600 to Rs 1000, the rate of edible oil is Rs 125.  200, then 50 percent increase in the prices of pulses, vegetables, fruits, milk, eggs, fish, meat and other commodities has made the livelihood of the common man miserable.  However, according to the Reserve Bank of India report, the average rural laborer’s daily wage during this period has increased from Rs 224 in 2015 to Rs 286 in 2020.
In the seven years between 2015 and 2022, the prices of essential commodities have increased by 50 percent, while the real income rate has increased by only 22 percent.  These figures show that inflation has hit the incomes of the poor and has made life difficult for the poor as food and drink constitute a major part of their total expenditure.  The overall fate of this will be that the income of the poor will decrease and he will also have to take loans to maintain a minimum lifestyle.  According to the NSSO report, in the last few years, people in rural India have had to cut their food expenses drastically.  The impact of rising inflation going forward will continue to affect the health and nutritional quality of children, women and the poor as their daily caloric needs will not be met.  Therefore, sensitive government intervention is necessary to curb food and fuel inflation, increase employment in rural areas, reduce income inequality, help the poor, strengthen public distribution of essential commodities and increase the average daily wage.  These policy measures can significantly reduce the cost of living and the impact of inflation on the poor.