No ‘Achhe Din’: PM Modi under fire as middle class hit hard due to rising costs

March 23, 2016

Mumbai/ New Delhi, Mar 23: Sharp rises in education and healthcare costs in the last two years have hit the nation’s burgeoning middle class hard, denting Prime Minister Narendra Modi’s popularity among the relatively well-off ahead of a series of state elections.

Price increases for services deemed a luxury for most Indians could also complicate the central bank’s plans to cut borrowing costs, with decades of low investment in schools and hospitals meaning they will remain expensive for some time.

AchheDin“Spending on my son’s education and medicine for the family has gone up sharply,” said Sambuddha Banerjee, a 47-year-old IT professional, who works in Kolkata.

“The government also cut fuel subsidies and tried to impose taxes on our pension savings. This is not acceptable.”

Banerjee is thinking twice about voting for Modi’s ruling Bharatiya Janata Party (BJP) at elections scheduled for 2019.

That view is far from universal, but is already on the radar of a government that swept to power in 2014 with promises of economic reforms and pro-business policies that appealed to aspirational Indians living in big towns and cities.

Modi has already seen support among the huge agriculture sector ebb following several crop failures, so appeasing the middle class, which accounts for about a quarter of the 1.3 billion population, looks increasingly important.

“Rising prices of commodities and services which have a higher weight in the consumption basket of middle class households is an issue that cannot be ignored,” said a senior finance ministry official.

“This is a supply side issue and can’t be addressed in the short term,” he added.

To ease some pressure on middle income earners, the government plans to hike salaries of its nearly 10 million employees by 24 per cent this year.

GOVERNMENT BACKS DOWN

Education costs have risen 13 per cent, housing 10 per cent, healthcare 14 per cent and electricity 8 per cent since Modi took charge in May 2014, time series data on CPI inflation collected by the Ministry of Statistics showed.

That puts a disproportionate strain on middle class incomes, with education costs accounting for 7 per cent of urban households’ monthly spend compared with 3.5 per cent of rural households, data showed.

Food and beverage prices, meanwhile, which account for more than a half of the CPI basket, fell 10.5 per cent since Modi’s election victory, although there, too, items like milk and eggs favoured by middle income Indians have actually risen.

Owners of motorcycles and cars are further upset that the government took away some windfall gains from falling oil prices in the form of taxes, and people across the country are cutting back on discretionary spending as expenses outstrip earnings.

Underlining the government’s sensitivity to a “squeeze” on the middle class, earlier this month it agreed to roll back plans to tax pension fund withdrawals following a backlash from salaried workers.

While national elections are three years away, the BJP’s popularity faces earlier tests, with ballots in states including West Bengal and Assam months away, and the key battleground of Uttar Pradesh due next year.

RATE CUT

A disgruntled middle class also poses problems for Reserve Bank of India (RBI) Governor Raghuram Rajan, who has pledged to bring down consumer price inflation to 5 per cent by March, 2017 and 4 per cent in the medium term.

Headline retail inflation eased to 5.18 per cent in February from 5.69 per cent in January, but core inflation, which strips out food and fuel, rose to 4.9 per cent from 4.75 per cent, mostly due to increases in education, housing and personal care.

The RBI is widely expected to cut its policy interest rate by 25 basis points on April 5, after lowering it by 125 basis points last year thanks in part to easing inflation and the government’s fiscal consolidation roadmap.

“The spare capacity in the economy is not getting reflected in the core inflation number, which means the challenge for monetary policy to control the demand side pressure is much more,” said one senior policymaker, hinting at the difficulty of deep rate cuts beyond April.

That could be a bad news for middle income Indians who are looking to the central bank to bring down their borrowing costs, particularly after deposit rates fell.

The government slashed the federal pension fund rate and deposit rates offered to millions of small savers to align with market rates, triggering protest from opposition parties.

Despite the complaints, many are willing to give Modi more time to address their concerns.

“Our expectations of him were very high, and he needs more time to solve these age-old problems,” said Kundan Mukherjee, a 51-year-old from Jharkhand, who works for a pharmaceutical company.

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UMMAR
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Wednesday, 23 Mar 2016

JOKE OF THE MONTH ACCCHE DIN WHA WHA HA HA HA

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Agencies
May 14,2020

Wayanad, May 14: Coronavirus scare has gripped the police in the district as around 70 personnel, including their chief, have gone on quarantine as a precautionary measure after three colleagues tested positive for the pathogen.

A day after three personnel of Mananthavady police station tested positive for COVID-19, District Superintendent of Police R Illango said on Thursday he and others decided to quarantine themselves as they had been in contact with some other colleagues from the station. Twenty four personnel, including a Deputy Superintendent of Police, have gone on quarantine after giving their samples for testing three days ago as a measure of abundant caution after a man questioned in Manathavady police station in connection with a case tested positive for the virus on May 9.

Of the 24, results of 18 have been received so far and three personnel tested positive on Wednesday, following which the station has been disinfected and virtually closed and contact tracing underway.

On Wednesday, the SP and some other police personnel had interacted with the DySp for close to an hour at a checkpost following which over 40 police personnel have voluntarily decided to go on quarantine.

"We are actually being over cautious. I have spoken to all the policemen. We know we are in the high-risk job. We are concerned that we might spread it to family members, public, or colleagues. So we want to maintain extreme caution", Illango, who is on home quarantine, told PTI.

With the three personnel testing positive in the state, Kerala Director General of Police Loknath Behera said the force should take all necessary precautions and fearlessly go ahead in the fight against the virus.

The three from Manathavady are believed to have contracted the virus after they came in contact with a man who was called to the station in connection with a case on April 28 and May 2. He later tested positive for COVID-19 on May 9. This man is suspected to be a contact of a truck driver, who has turned out to be a super spreader after returning to the district from Chennai's Koyambedu market, a hotspot, and had infected at least 10 others, including his wife, mother and grandchild.

The Mananthavady police station has been disinfected with the help of the Health Department and Fire Force personnel. Computers and wireless equipment have been shifted to other police buildings and the station's charge has been temporarily given to Vallamunda Station House Officer, a release from the DGP's office said. Two police personnel wearing personal protection equipment (PPE) kits would be at the station to take care of necessary work and a health worker posted to help them, it said.

Police personnel from other stations have been mobilised to meet any shortage, Illangosaid adding they need not come to the police station but directly go to the duty points. Meanwhile, the district health authorities said the standard operating procedure (SOP) has been initiated as soon as the test results of the three came by Wednesday noon. Accordingly, all personnel who were on duty were sent to nearby lodges and resorts for quarantine.

One of the policemen who tested positive had been to Sulthan Bathery police station and Muthanga area, where the DySP and few other officials were also present. This is being seen as a lapse on the part of the police department. However, police sources said none had directed the 24 personnel, whose samples were collected on Monday, to go on quarantine or abstain from duty. The health department is trying to map out the contact list of the police personnel to contain further spread from their direct and secondary contacts.

According to police sources, the Sulthan Bathery Circle Inspector, two sub-inspectors and about 18 police personnel of the Mananthavady police station are among those who have been put on quarantine. As part of containment measures, the courts in Sulthan Bathery and Mananthavady have been closed on Thursday, officials said. 

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News Network
January 24,2020

New Delhi, Jan 24: Although India's Ujjwala programme encouraged adoption of liquefied petroleum gas (LPG) for cooking among the poor, households availing the scheme have not shifted away from using highly polluting fuels like firewood, a study reveals.

The researchers, including those from the University of British Columbia (UBC) in Canada, found that additional incentives to encourage regular use of cooking gas are necessary for a complete transition to clean cooking fuel among poor rural households.

They noted that about 2.9 billion people across Asia, Africa, and Latin America burn solid fuels like firewood to meet their cooking energy needs.

This has significant negative implications for public health, the environment, and societal development, according to the researchers.

Through the Pradhan Mantri Ujjwala Yojana (PMUY), India has provided capital cost subsidies to poor women to adopt a clean-burning cooking fuel or LPG.

The researchers explained that within the first 40 months of the scheme, more than 80 million households obtained LPG stoves.

However, the full benefits of LPG adoption depend on near complete replacement of polluting fuels with LPG, according to a research-based policy brief published in the journal Nature Energy.

The scientists said this cannot be assumed solely on the basis of LPG presence in the household.

"Our research shows that Ujjwala was able to attract new consumers rapidly, but those consumers did not start using LPG on a regular basis," Abhishek Kar, a postdoc at Columbia University in the US, told PTI.

The study analysed LPG sales data for over 25,000 consumers, including PMUY beneficiaries, as well as general rural LPG consumers in Koppal district of Karnataka.

The scientists employed data covering all LPG purchases of PMUY beneficiaries through their first year in the programme.

They also assessed the general rural population's purchases during their first five years as consumers to assess the effect of experience on use.

The findings estimate that an average rural family needs to purchase five 14.2 kilogramme-cylinders annually to meet half of their cooking needs.

However, the study said just seven per cent of PMUY beneficiaries in Koppal purchased five or more cylinders annually, suggesting that the beneficiaries seldom use LPG.

The general (nonPMUY) consumers in this region use on average two times more LPG cylinders than PMUY beneficiaries, the researchers noted.

Yet, only 45 per cent of nonPMUY consumers use five or more cylinders per year -- even after several years of experience with LPG, they said.

The team assessed price and seasonal factors affecting LPG use among the general population over a three-year period.

It found that LPG consumers are sensitive to price and seasonality -- LPG cylinder refill rates are lower in the summer when agricultural activity is limited, and cash is scarce.

"There was no scheme incentives to promote use, except general LPG subsidies which is available to all, including the urban middle class," said Kar, who was a Ph.D. scholar at UBC when the research was published.

"If there is no additional income, what cost would a poor family on an already tight budget cut to pay for an extra expense on a regular basis.

"Ujjwala has started the scheme of 5 kg-cylinder in response, but the impact of that on LPG sales is still publicly unknown," he said.

These findings, the researchers noted, suggest the need for additional measures to promote regular LPG use for all rural populations.

Although the finding come from a single district in Southern India, it may also apply to other areas with similar socio-economic conditions, they said.

A more expansive evaluation of PMUY would help design targeted incentives to transform infrequent users to regular users, according to the researchers.

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Agencies
May 23,2020

New Delhi, May 23: India will try to restart a good percentage of international passenger flights before August, Civil Aviation Minister Hardeep Singh Puri said on Saturday, three days after announcing resumption of domestic flights from May 25.

All scheduled commercial passenger flights have been suspended in India since March 25 when the Modi government imposed a lockdown to contain the novel coronavirus pandemic.

"I am fully hopeful that before August or September, we will try to start a good percentage of international civil aviation operations, if not complete international operations," Puri said during a Facebook live session.

"I can't put a date on it (restarting international flights). But if somebody says can it be done by August or September, my response is why not earlier depending on what is the situation," he said.

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