Taming the asura

The consumer price index-based inflation figures reported in the thick of the festive season – 4.35% for September compared to 5.30% for August – would give the impression that the goddess has succeeded in killing the inflation asura. One cannot really be blamed for such an interpretation. The September figure is a five-month low and extends the downward drift of the key figure to the third month on the trot. The inflation in September 2020, in comparison, was a very high 7.3%. To be sure, the 4.35% was lower than almost all predictions of experts.

It was helped by the prices of food items, with a nearly-47% weightage in the Consumer Price Index, that was steady. However, it would be naïve to assume that there are no major concerns now. Right now, it appears that rising prices of fuels can spring a nasty surprise to the wallet of the common citizen.

Almost all sorts of fuel prices, with the possible exception of solar energy, are either rising or might rise at any moment. Prices of petrol, diesel, LPG, CNG, coal are all pushing upwards. The country’s power plants are all starved off coal and imports would mean a quick rise in the generation cost since coal prices are on an upswing all over the world due to sudden demand from the major economies waking from the pandemic-induced slumber.

And there are no price cushions now. Petrol and diesel costs are at a historic high with neither the Central nor the state governments ready to compromise on the huge taxes collected from these on and above the rising crude costs globally. LPG prices too are being passed on to the consumers with the Centre removing the subsidy element in cylinders for all users. The essential kitchen fuel prices rose an astounding 50% in the past year. CNG, touted as a clean fuel for a range of applications from factories to kitchens, was hiked by 62% in end-September.

The trajectory of energy prices packs enough concerns for the common man. With the pandemic wreaking havoc on the employment scene, energy prices can shock the personal finance calculations of the common man. With global prices rising and the governments of the country eager to pass the effect on to the common man, reining in the inflation asura is a challenge even for the divine powers.