Shivaji Sarkar
The Union Government needs to pursue policies that can ease inflation and reduce prices to lubricate the economy. The trap laid by previous governments is seemingly tightening.
It is not just the fuel price that firm up prices. Though it remains the base, there are other factors like continuous increase in insurance premia, toll taxes, banking, parking, airport charges, tuition fee, dynamic railway fare, high taxi and bus fare apart from high commodity prices, that lead the country to a phenomenon of price rise.The flak for this is borne by the Government as it is blamed for not controlling the situation. It also has to bear the cost by paying its staff more to sustain unhindered profiteering of the unscrupulous. The Government has taken a view that it will not intervene to facilitate
business.
Business in this country thrives on the poor man’s money, and loans are easily available through certain questionable bank practices. More the inflation, higher the charges, more the banks gobble up public funds; their coffers grow and so do their exploitative practices. All the same, the private reserves either remain intact or increase. Who suffers? The common man and the Government of the day.
The Government itself has sealed itself out through a system of regulators. The latter, whether in insurance, electricity or telecom sectors, at times act in favour of the perpetrators and are casual in protecting consumers. The logic seems to be that the ‘the consumer has to pay more and more to keep businesses profitable’ – or stated differently, the consumer can be exploited at all times and if he seeks a relief, it is to be denied, as being ‘unsustainable’.
Should we really have such regulators or go back to the earlier system of people’s (Government) control? It needs to be pondered seriously. Regulators are primarily responsible for higher power bills, higher insurance premia and most other hikes.
Just go to any city, and parents are to be found fighting with schools who arbitrarily raise fees, force students to buy books and stationery, uniforms etc. A failure to do so can cost the students dearly, including the school’s refusal to hand over their results, cancellation of admission and many other retributive practices.
Is there a remedy? State Governments have expressed their inability on many counts to help the parents or the students. Officials may say this is not part of the economy. This is a grave fallacy.
The high cost of education is causing severe stress among the middle-class citizens. They have stopped going to the market for buying anything except which is utterly necessary. Even there, they have been reducing necessary consumption of essential items. This affects the Prime Minister’s concept of Make in India. Such reduction in demand affects production. The nation needs to seriously reconsider whether the cost of education should be low or not. The institutions at all levels have devised methods to pay less to the teachers – they are even asked to refund a part of their salary credited to their bank accounts – and increase management profits.
The insurance companies and the insurance regulator have been raising premia every year from third party motor- vehicle claims to health, fire, property etc, on unjustifiable pretexts. The claims in this country are at their lowest but the regulator allows insurance companies enormous increases, forgetting that this finally impacts industry and individuals alike. It increases cost of operations and leaves them with less spare money to sustain the market. The regulator has itself stated that “incurred claims ratio of the motor segment came down by two percent in 2015 against 2014”. Then why has it hiked the third party premium? It hits the transport sector heavily, which then hikes its tariff. No less illogical is the decision to disallow registration of high-powered diesel vehicles in Delhi. The courts are supposed to go by the provisions of the Motor Vehicles Act, that allows all vehicles to ply all the 24 days a provision that helps production of new vehicles and the creation of jobs. The National Green Tribunal is playing havoc with the production process.
If everything is to be banned, then let us start with banning the NGT. In no country are vehicles junked in the manner that the NGT suggests. It hurts the economy and wealth creation.
The Niti Ayog and the Union Government have to consider various aspects that are hindering economic growth and creating an inflationary process. They also need to look at how they can keep business expenses low – an essential condition for ease of doing business. A new holistic look at the economy and those adding to inflation, is needed. A stable and judicious pricing system is required to keep the economy on rails and cut fiscal deficit.
