Judicious spending undercut by high inflation

The UPA government would have been on its high horse by now had not food inflation and leakages in its public delivery system deflated the gains.

Updated on: May 23, 2013, 03:08:52 IST

Hindustan Times | By Chetan Chauhan, New Delhi

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The UPA government would have been on its high horse by now had not food inflation and leakages in its public delivery system deflated the gains.

The Manmohan Singh government adopted the inclusive growth model that relies on investment of the gains of high economic growth in the social sector to bridge the rich-poor divide.

The approach was noble but Singh’s team did not anticipate high food prices to come as a cropper. The admission of failure came from Singh at the January conclave of Congress where he described inflation as “one shortcoming in their record.”

The overall annual inflation of 6.5% was not the real concern. What hurt the UPA was its inability to check rise of food prices, especially cereals, pulses and vegetables, which more than doubled in the last nine years.

High food inflation dented the pockets of the poor (Congress’s traditional vote-bank) and the middle-class (which it attracted in 2009 elections) despite a three-fold increase in average annual income of Indians — from Rs. 23,242 in 2004-05 to Rs. 68,747 in 2012-13.

The National Sample Survey reports between 2004-05 and 2009-10 show that the divide between richest and poorest 20% of the population has widened and inflation was one of the primary reasons for it.

What remains to be seen is whether high food inflation will undo the electoral gains of allocating over Rs. 15,00,000 crore for the social sector in its ten years (including 2013-14). The UPA in the 11th plan spent Rs. 2,50,000 crore on education and health.

ABOUT THE AUTHOR
Chetan Chauhan
Chetan Chauhan is the National Affairs Editor looking into all aspects of news and features from across India. A Chevening scholar with over three decades of experience in reporting and news management, Chetan has extensively covered all important aspects of the social sector, political economy, environment and climate change nationally and internationally. He did a journalism course at the Reuters Institute of Journalism in Oxford and Digital Media training at Nanyang Technological University in Singapore. He started as a reporter with The Statesman in 1996 and joined the Hindustan Times in 2000 in the metro bureau covering environment, crime and Delhi politics. He covered hot local news, from the Jessica Lal murder case to the rebellion of Delhi Congress MLAs against then Chief Minister Sheila Dikshit, to the replacement of toxic vehicle fuel with cleaner compressed natural gas (CNG) in the national capital. Some of his stories on air pollution became part of the Supreme Court’s landmark MC Mehta versus Government of India case in the National Capital Region (NCR), forcing the government to take corrective measures. As part of the national political bureau since 2004, he covered important central sectors such as environment, education, social justice, labour, rural development, water resources, renewable energy, agriculture, broadcasting and the Planning Commission for more than a decade producing several exclusive and investigative breaking stories. His specialisation is the environment, having covered at least a dozen United Nations global conferences on climate change, biodiversity and wildlife including climate summits in Paris, Copenhagen and Bali. He also covered India’s two five-year plans ---11th and 12th and reported on drafting and execution of right based laws such as Right to Education, Right to Information and rural job guarantee law, MG-NREGA, now being introduced in new format as VG-RAM-G Act. He has in-depth knowledge of social sector issues. He was one of the first to report on tigers vanishing from Sariska and Panna wildlife reserves in 2004 and 2008, respectively, leading to the setting up of the National Tiger Conservation Authority (NTCA) and the introduction of stringent penal provisions for poaching. He has written extensively on the rising human-animal conflict in India and the degradation of India’s biodiversity hotspots because of mining and other activities. Since 2004, Chetan has covered Parliament comprehensively and participated in training on the nuanced coverage of Parliament proceedings. He has travelled extensively across India to cover national and provincial elections since 1998, especially in the Hindi heartland states, considered India’s road to power. He writes a regular column for Hindustan Times, Ecostani, on important national politics, economy, Himalayan ecology and environmental issues. His other responsibilities include providing inputs for edits and edit page articles for the publication, apart from managing news flow from across India.Read More

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