India is entering into a major cost of living crisis due to multiple domestic and international crises, which included soaring food and energy prices, rising poverty, joblessness, endangered food security, a disincentive to farmers growing food articles, and lopsided policy interventions. The way the government is responding to the issues lacks a holistic approach, and problems are being responded to on an ad-hoc basis with little temporary success to less number of people than really in need, which further contributes to exacerbating the cost of living crisis. For example, the food security report of 2022 has calculated the cost of a healthy diet in India in 2020 to be 2.970 dollars per day, and the number of people unable to afford it was 70.5 percent, i.e., 973.4 million people. However, the Modi government provisioned only food grains for only 800 million people while many other essential needs were unmet. Even then due to corruption and other administrative failures, the food grains did not reach all targeted people chiefly because millions of people did not have documents that the government failed to supply. The two years of the pandemic have exacerbated the situation further and pushed an estimated 230 million into poverty. The price rise has further added several million to it.
The present cost-of-living crisis has now become a global phenomenon, as the UNDP has said in its report titled, “Addressing the Cost-of-living Crisis in developing countries: Poverty and vulnerability projections and policy responses.” It is, therefore, important for India to respond to the crisis primarily on its own, since the whole world is suffering from this crisis now, and every country has been dealing with its problems with great difficulty. The economic turmoil and human miseries in our neighbourhood in Sri Lanka should be an eye opener for India, and we must heed the warning of the UNDP. Notably, it says, “Sri Lanka’s misery should be a warning to us all on global food, fuel, and financial crisis.”
Price rises have been sounding the alarm of a global inflationary surge not seen in years. The IMF has projected an inflation rate of 6 percent for developed countries, and 9 percent for developing countries in 2022. As for India, its headline retail inflation rate, as measured by CPI, stayed largely unchanged at a high of 7.01 percent in June as against 7.04 percent in May. It has a great impact on India’s poor. India thus needs a holistic approach to balancing affordable prices for people as consumers and doing away with price disincentives to farmers to ensure sufficient food articles production and smooth supply to the consumers. The self-sufficiency in food grains at the national level must be broadened to all other crops also, such as pulses and oilseeds. It could not be done unless greater support to farmers is provided, in terms of input cost, improved scientific agriculture, and infrastructural improvement in the irrigation and agriculture market. However, it would not help much if we fail to ensure food security at the household level. India immediately needs a comprehensive social protection program not only to save people in great distress due to the deepening cost of living crisis but also to prevent its social consequences such as general social unrest and susceptibility of the people in distress to perpetrators of evils who exploit the situation for their benefit. A National Price Control Policy for all goods and services is imperative, but who cares when the policymakers are deriving financial gains from profiteers, and in many cases the nexus between the two has already been exposed.
