The move to slash LPG cylinder price by Rs 200 and four other recent measures, including price control of key foods like tomato and onion, shows that the Narendra Modi-led central government is going all out against inflation ahead of the upcoming state elections this year and the ultimate 2024 poll battle. Besides providing relief to the public, the idea is also to douse a major plank by the opposition.
India’s core inflation remains under control and softened to a three-year low in the first quarter of this financial year, but it was retail inflation that was concerning as it rose to a 15-month high of 7.44 percent in July. This led to the Centre making some major moves because there is feedback on the ground that this could prove to be a challenge in the five assembly elections ahead.
From importing pulses to curtailing the export of basmati rice; procuring onions while putting a hefty export duty to softening tomato prices over the past fortnight; and now, finally, LPG price cut by Rs 200 – these moves are also directed at wooing women voters, who were feeling the pinch of price rise of food items and LPG cylinders.
Women voters have been a key backer of the BJP government with schemes like the PM Awas Yojana and Ujjwala being the USP of Modi’s first term. With the moves to reduce retail inflation, the Centre is hoping to reap political dividends ahead of the state polls as well as 2024 Lok Sabha elections. Gas prices have troubled the saffron camp in Karnataka and Himachal Pradesh where it lost to the Congress.
News18 had earlier reported that in a direct market intervention by the government from August 21, the National Cooperative Consumers Federation of India started selling onions to consumers at a subsidised rate of Rs 25 per kg. This came within a day after the Centre imposed a 40 percent export duty on onions to ensure its stocks in the domestic market and for cooling down prices ahead of the festive season.
Earlier, the government similarly intervened to provide tomatoes at subsidised rates to consumers, which has led to softening of prices. Two days ago, the Centre also banned the export of basmati rice valued at less than $1,200 per metric tonne after banning the export of non-Basmati rice on July 20 due to price rise in the domestic market.
The government took steps last month to improve the import of pulses and domestic production. It is hoped that retail inflation will cool down with these steps by next month while the core inflation is kept under acceptable limits.
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