A very well researched and interesting article! As per the latest data, WPI as well as CPI which measure inflation in the country have fallen in April and inflation is less than 5% after many years.
Now all eyes are on the Monetary policy committee and how it will change the interest rates in June .The main concern remains economic growth of the economy and the level of Investment.
Thank you for your thoughts. True, it will be interesting to see how RBI reacts to the new inflation numbers. To be fair to them they have, so far, been ahead of the curve. Inflation is such a sneaky problem--in this instance it was almost entirely due to global factors.
It's interesting to know more about the change in New India's inflation metric. Strangely enough, it is getting more and more difficult to gauge the mood of New India. Granted that inflation was a deciding factor but no one remembered that it's a global phenomena and India is better off than others. Who would've imagined that the humble cooking gas would take centre stage? The fact that so many people got access to LPG is something to be very proud of. What nobody could foresee was the additional financial burden it put on those who are already struggling to make ends meet. The Top Promises are also a reflection of what the future trends will be. The word Free is working like a magic wand. Nobody gives a second thought about the feasibility of such Promises and who will eventually bear the financial burden. The growing aspirations of people are definitely having far reaching consequences.
Thank you for your thoughts. True, one could not have imagined the cooking gas becoming an electoral issue. And, this when even a decade ago a large chunk did not own a cooking gas connection. Essentially once you provide the wherewithal aspirations grow in leaps and bounds. Another way to look at it is that for years aspirations have been suppressed by denying people basic needs!
True freebies are a fiscal problem. There are limits to populism. At the same time it will be prudent to remember that welfare is not the same as freebies. Just like the union government decided to fork out free food grains given the exceptional circumstances that hit India after the onset of the covid-19 pandemic, a similar safety net should be considered.
A lot of detailed research and analysis has gone into this very interesting article Anil. Honestly the result of this election had been anticipated by me and the reasons for me were weak and indecisive state leadership, established corruption charges, insensitive attitude towards repair of roads and other civic amenities, law and order not safe for especially women and depending on caste and community politics to see them through were the main reasons for the defeat of the BJP. The situation was tailor made for an anti incumbency vote; added to this was the critical issue of inflation and unemployment facing the entire country. The cooking gas prices are perhaps an important part of the inflation in the household expenses. The rural households are switching back to their earlier methods, whenever the money for cooking gas is not there. This is more of a problem of controlling carbon emissions. There could be a series of anti incumbency results in the current inflationary trend, although reports indicate a partial control of prices; however states with weak leadership will probably see a change.
Your thoughts are interesting. Because most analysts were saying that this was a waveless election. The results suggest otherwise. In any case elections are never won for a single reason. Though inflation is pinching the electorate. And, what is fascinating is that aspirations, together with material empowerment has rejigged the consumption basket of the electorate of Karnataka.
Hello Anil: As always, a really insightful column. It makes me think of an interaction at a pharma conference 30 years ago in Bangalore when people thought the bottom end of the economic ladder would be satisfied with homeopathic drugs forever more; sounded bizarre to me. This change was coming. This is what poverty elimination looks like in real time.
Gandhiji said, “These are the days of equality everywhere.” Modi, coming from bottom end of pyramid, is the PM most sensitive to what upping the political game looks like in addressing needs of people at the bottom. The rest of the political class is only now beginning to realize the need to catch up with what real poverty elimination entails. People are going to keep expecting more performance and delivery. Otherwise, they will replace with new sets of leaders. Every election is going to be the toughest job interview one can imagine. All of this is real progress. But, the bar will keep being raised, in all spheres, whether economic or security. Using George W. Bush’s line, “soft bigotry of low expectations” is out the window. As Jaishankar has said, you won’t be able to satisfy people by saying, “Wait until we become like China before we assert our interests; they will ask what are you doing now?” There is no turning back. This will ultimately spread to all of India’s neighbors.
Looking forward to future columns. Thank you very much for all of your efforts. Best regards.
You summed it up best: consequences of eliminating poverty. You are right. Most political parties, armchair analysts have been blindsided at the pace at which aspirations have surged, especially after the elimination of extreme poverty. As a country we are exploring new socio-economic experiences. Fascinating and honoured to be able to chronicle this change.
Dear Anil,
A very well researched and interesting article! As per the latest data, WPI as well as CPI which measure inflation in the country have fallen in April and inflation is less than 5% after many years.
Now all eyes are on the Monetary policy committee and how it will change the interest rates in June .The main concern remains economic growth of the economy and the level of Investment.
Dear Vandana,
Thank you for your thoughts. True, it will be interesting to see how RBI reacts to the new inflation numbers. To be fair to them they have, so far, been ahead of the curve. Inflation is such a sneaky problem--in this instance it was almost entirely due to global factors.
Looking forward to your continued participation.
Best
Anil
Dear Anil
It's interesting to know more about the change in New India's inflation metric. Strangely enough, it is getting more and more difficult to gauge the mood of New India. Granted that inflation was a deciding factor but no one remembered that it's a global phenomena and India is better off than others. Who would've imagined that the humble cooking gas would take centre stage? The fact that so many people got access to LPG is something to be very proud of. What nobody could foresee was the additional financial burden it put on those who are already struggling to make ends meet. The Top Promises are also a reflection of what the future trends will be. The word Free is working like a magic wand. Nobody gives a second thought about the feasibility of such Promises and who will eventually bear the financial burden. The growing aspirations of people are definitely having far reaching consequences.
Dear Ranjini,
Thank you for your thoughts. True, one could not have imagined the cooking gas becoming an electoral issue. And, this when even a decade ago a large chunk did not own a cooking gas connection. Essentially once you provide the wherewithal aspirations grow in leaps and bounds. Another way to look at it is that for years aspirations have been suppressed by denying people basic needs!
True freebies are a fiscal problem. There are limits to populism. At the same time it will be prudent to remember that welfare is not the same as freebies. Just like the union government decided to fork out free food grains given the exceptional circumstances that hit India after the onset of the covid-19 pandemic, a similar safety net should be considered.
Look forward to your continued participation.
Best
Anil
A lot of detailed research and analysis has gone into this very interesting article Anil. Honestly the result of this election had been anticipated by me and the reasons for me were weak and indecisive state leadership, established corruption charges, insensitive attitude towards repair of roads and other civic amenities, law and order not safe for especially women and depending on caste and community politics to see them through were the main reasons for the defeat of the BJP. The situation was tailor made for an anti incumbency vote; added to this was the critical issue of inflation and unemployment facing the entire country. The cooking gas prices are perhaps an important part of the inflation in the household expenses. The rural households are switching back to their earlier methods, whenever the money for cooking gas is not there. This is more of a problem of controlling carbon emissions. There could be a series of anti incumbency results in the current inflationary trend, although reports indicate a partial control of prices; however states with weak leadership will probably see a change.
Dear Gautam,
Thank you for your kind words and thoughts.
Your thoughts are interesting. Because most analysts were saying that this was a waveless election. The results suggest otherwise. In any case elections are never won for a single reason. Though inflation is pinching the electorate. And, what is fascinating is that aspirations, together with material empowerment has rejigged the consumption basket of the electorate of Karnataka.
Fascinating times.
Best
Anil
Hello Anil: As always, a really insightful column. It makes me think of an interaction at a pharma conference 30 years ago in Bangalore when people thought the bottom end of the economic ladder would be satisfied with homeopathic drugs forever more; sounded bizarre to me. This change was coming. This is what poverty elimination looks like in real time.
Gandhiji said, “These are the days of equality everywhere.” Modi, coming from bottom end of pyramid, is the PM most sensitive to what upping the political game looks like in addressing needs of people at the bottom. The rest of the political class is only now beginning to realize the need to catch up with what real poverty elimination entails. People are going to keep expecting more performance and delivery. Otherwise, they will replace with new sets of leaders. Every election is going to be the toughest job interview one can imagine. All of this is real progress. But, the bar will keep being raised, in all spheres, whether economic or security. Using George W. Bush’s line, “soft bigotry of low expectations” is out the window. As Jaishankar has said, you won’t be able to satisfy people by saying, “Wait until we become like China before we assert our interests; they will ask what are you doing now?” There is no turning back. This will ultimately spread to all of India’s neighbors.
Looking forward to future columns. Thank you very much for all of your efforts. Best regards.
Shiv
Dear Shiv,
Thank you for the kind words and inspiration.
You summed it up best: consequences of eliminating poverty. You are right. Most political parties, armchair analysts have been blindsided at the pace at which aspirations have surged, especially after the elimination of extreme poverty. As a country we are exploring new socio-economic experiences. Fascinating and honoured to be able to chronicle this change.
Best
Anil