Undoubtedly, one of the prime reasons for public discontent against the UPA government was inflation, price rise and the failure to check the prices of essential food commodities. Prime Minister Narendra Modi and Finance Minister Arun Jaitley inherited an economy in shambles with a low growth rate, high inflation rate and high fiscal deficit.
The union government and its Finance Minister faced the daunting task of containing inflation and at the same time providing an impetus to growth and achieving fiscal consolidation. The Congress, which had failed miserably on this account, thought it would be impossible for the new government to crack this. Not only did the opposition Congress taunt the BJP about the economy right after the new government took over, but it also tried to create panic with exaggerated and inaccurate references to a weak monsoon, and the turmoil in Iraq and its possible impact on oil prices
When the inflation numbers for September were announced this week, it emerged that the inflation rate had plunged to 2.38 per cent - the lowest in five years since October 2009, a period when demand fell sharply because of global recession. Consumer price inflation fell to 6.46 at an all-time low.
Wholesale food inflation was 3.52 per cent compared to the previous month's 5.15 per cent. Wholesale vegetable prices fell 14.98 per cent in September on a year-on-year basis. The data further revealed that inflation in vegetables, milk, eggs, meat and fish also declined in September.
Finance Minister Arun Jaitley immediately after taking charge had declared that controlling inflation will be a priority. The central government had asked all states to ensure proper supplies of essential commodities. The government had ordered a crackdown on hoarding on June 17 to control rising food prices and imposed export restrictions on certain farm commodities.
Potatoes and onions were brought under the ambit of the Essential Commodities Act, and states were authorised to impose stock limits on them to check hoarding. State governments were also advised to amend the APMC Act to de-regulate the sale of fruits and vegetables. The centre released 10 million tonnes of wheat in the open market and 50 lakh tonnes of rice via the Public Distribution System to check prices of wheat. A price stabilisation fund has also been constituted to control inflation.
Before the budget session of parliament began, the Centre had called for a meeting of Food Ministers from all states on July 4. The BJP government hiked the minimum export price of onion to $500 per tonne to improve the domestic supply and curb prices and said the availability and supply of other such commodities will be closely monitored.
The prices of petrol and diesel are likely to be reduced further.
It was reassuring to hear the confident statement of Finance Minister Arun Jaitley saying that we are heading towards a period of low and stable inflation rate - "Acche Din" for the people of India who were consistently subjected to a high double-digit inflation rate during the UPA regimen.
The BJP government is also working on a new monetary policy framework under which it will fix the inflation target that the Reserve Bank needs to achieve.
The change promised by the PM is being felt by the people - in less than six months.
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