The Prime Minister’s “Raksha Bandhan and Onam gift” that comes in the form of a subsidy of Rs 200 on LPG gas cylinders for all consumers including the PM Ujjwala Yojana beneficiaries who were already availing the same subsidy and for whom the effective subsidy will now be Rs 400 marks the return of the “subsidy regime” and in time for the series of Legislative Assembly elections scheduled to kick off in the later part of the year. They are to be followed by the election to the Lok Sabha early next year.
The price of an LPG cylinder weighing 14.5 kg was only Rs 450 when Mr Narendra Modi first came to power in 2014. Of course, the government had to subsidise it as crude prices were sky-high. The Modi government dismantled the subsidy regime slowly, first by remitting it directly to the bank accounts of consumers and then stopping it altogether. The net result is that a cylinder began to cost Rs 1,100 or so in the open market across the country.
Inflation and spiralling prices is the last thing sought for by a government in an election year. Unfortunately, the signs do not appear bright as reflected by various indicators, price indices not excluded. The retail inflation rate for July spiked to 7.44 per cent this year from 4.81 per cent in June in a deeply disturbing phenomenon as it was caused by price rise in food, especially vegetables. Given that the country witnessed a shortfall of 30 per cent in rain in August and reports of an uneven southwest monsoon abounding, this year’s kharif harvest could be under pressure. Under such circumstances, the government needs to become proactive and take crisis measures. If it doesn’t, it cannot go back to the common man and woman for votes later. The gift, therefore, is a strategic one.
