The Cost of Living in "New India".

 

Cometh the festive season, cometh the price hike. An economist will tell that the inflation rate is in a declining mode. The Retail inflation across the country is based on Consumer Price Index(CPI) fell to 4.35% in September 2021 from 5.30% in August 2021, though, data rarely speaks the truth. Only the sufferer can feel the suffering beyond the realm of data. 

So, who is the sufferer here?

A normal citizen of the nation who lies in the blanket of the middle class to lower class. A business that is struggling to survive post two waves of Covid in consecutive years. While talking about business, I am not referring to big Industrial powers, I am here for MSMEs that have suffered and still suffering since the inception of Covid in March 2020.

Middle Class

There should be no debate on the rise in the price of essential commodities in the last 1 or 1.5 years. The price hike has been varying from 40% to 100% on different food and necessary items. Although the price hike is a regular phenomenon in the festive season, this year's inflation is quite different in several terms. The state-sponsored tax draining is going robustly, the 40-45% tax on fuel prices, 34.5% hike in the price of edible oils in September 2021 upheld this argument. Fuel prices have hiked on 21 occasions since September 28. 

The pitiest thing about the current economic churning is that those who spend the most in the festive season suffers the most, and fill the pocket of governments. According to the Local Circles survey, planning to spend during season 2021 jumped from 30% in May to 60% in September. But, is it not an ethical responsibility of a democratic government to provide relief? 

The major argument of the government has been stating these issues as a global economic turmoil. Reports have a different call; Fuel Prices in India are 20.8% higher than in China, 39.3% than the US, 72.5% than Bangladesh and 67.9% than Vietnam.

MSMEs

According to a Report by TeamLease;

A small manufacturing company with just 1 plant and up to 500 employees is regulated by more than 750 compliances, 60 acts, 23 licences & regulations.

A Mid-sized manufacturing company with 6 plants spread across different states is regulated by more than 5,500 compliances, 135 acts, and 98 licences & registrations.

The government has been promoting the Ease of Doing Business ranking since the improvement of India's ranking after 2016. Corporate Tax cuts, Scraping of Restrospective Taxation, PLI Scheme, and Labour Reforms have helped in boosting the manufacturing sector in the last 1 or 1.5 years. But, do MSMEs(Micro, Small, and Medium Enterprises) get the desired relief, it doesn't look so. How much a Loan providing scheme can help when such hurdles come at first place in their recovery.

Electricity prices are higher by 7-12% than in the US, China or Bangladesh, 35-50% than S.Korea and Vietnam. The point is we are doing good in Ease of Doing Business(EoDB), But we are lagging behind when it comes to the Cost of Doing Business.

  

Also read: Privatisation: Monopoly in Public Sector

Conclusion

You can open Jan Dhan bank accounts, but you can't give the economic cushion. You can give Cylinders through Ujjwala Yojana, but there are hardships in filling by paying Rs. 1000. You can give  25 kg of rice, but it seems hard to cook. A person who used to earn Rs. 40,000 pre-pandemic can't afford the same commodities by earning Rs. 20,000. It is harsh on common people to pay Rs. 100- 115 for Petrol.

The stock market is in the bull run, we are heading towards a wealthy economy which is a joyful and proud moment for India, but there is a majority of citizens whose penetration in the market will take a long time, adopting technologies, coping with emerging economical advancement will take time. 

The burden has always been on the shoulder of the Middle and Poor classes. The pandemic has been a financial blow on the chest, another blow on the back is not justifiable.

Living in a developed economy is a tough thing, Sustaining in a developing country is tougher in a post-pandemic world.