Bipartisan approach needed to ease price rise woes
Finance Minister Nirmala Seetharaman met the Opposition attack head-on in Parliament by pointing out that the economy was on the mend, and there was ‘zero’ chance of the country slipping into a technical recession, implying degrowth for two consecutive quarters. To bolster her case, she quoted the collections of Goods & Services Tax (GST) that show a rise of 28% to Rs 1.49 lakh crore to its second highest level in July this year, after topping at Rs 1.68 lakh crore in April.
Though aggressive collection and anti-evasion measures are part of the success story, these figures do indicate a post-Covid regeneration. This is also borne out by the Index of Industrial Production (IIP) zooming to 19.6% in May as against 7.1% in April, wherein the manufacturing sector alone grew 20.6%.
There has also been a conscious effort to reduce the price pressure on the masses.
Steel prices had been cut, benefitting MSMEs, while edible oil and gasoline prices both big drivers of inflation have been substantially reduced. While these policy moves are laudable, the global headwinds of a dragging war in the Ukraine, food shortages and volatile crude oil prices will pose a serious challenge. This is conceded by the Reserve Bank (RBI), which has insisted on firming up interest rates as inflation has stayed above the RBI’s upper tolerance level of 6% for six months.
The government must also seriously respond to the Opposition’s charge that the unbridled imposition of GST on various goods has eroded family incomes. In its last round, the GST council has brought items such as flour, curd and paneer, pencils and sharpeners, and other children’s products into the tax net, making the impact of inflation and unemployment more uncomfortable. In a period of slowdown and vanishing jobs, the additional GST burden should have been avoided. It is also high time that the treasury and Opposition benches tackle issues concerning national interests such as price rise with a bipartisan approach without attempting to score brownie points. Easing the woes of the common person should be the common agenda.