PM Narendra Modi’s first lesson: Easy to criticise price hikes, tough to not do them

BJP had in its manifesto underlined its promise of a price stabilisation fund to check inflation.

Written by Shivani Vig | New Delhi | Updated: July 2, 2014 8:23 pm
Prime Minister Narendra Modi pushed up all passenger fares by 14.2 per cent and freight charges by 6.5 per cent effective from June 25. (Source: PTI) Prime Minister Narendra Modi pushed up all passenger fares by 14.2 per cent and freight charges by 6.5 per cent effective from June 25. (Source: PTI)

It was as if India was waiting for the BJP to come to power and bring prices under control. But Prime Minister Narendra Modi is yet to bring the ‘achhe din’ he promised by arresting spiralling prices. On the contrary, the grim realities of the economy seem to have forced him to hike fuel prices and train fares within the first month itself.

Incidentally, the BJP had in its manifesto underlined its promise of a price stabilisation fund to check inflation. But within weeks of coming to power, on June 16, the PM warned of “tough decisions” over the next couple of years to improve the country’s fiscal health. It seems Modi had finally realised that while it is easy to criticise the government for taking ‘hard decisions’, it was actually difficult not to take them while in power.

Here is a list of the “tough decisions” taken by the Modi government since May 26:

June 20: Rail fare hike

In what was the biggest hike in railway fares for decades, the Modi pushed up all passenger fares by 14.2 per cent and freight charges by 6.5 per cent effective from June 25. The Railways, however, clarified that 4.2 per cent of the fare hike was on account of a variable Fuel Adjustment Component (FAC) approved in last year’s rail budget, the remaining 10 per cent was a flat hike across all classes. But within days, giving in to the mounting pressure from ally Shiv Sena, the NDA government rolled back the fare hike for second class suburban trains.

The Railway Minister Sadananda Gowda defended the government’s measure of rail fare hike saying the decision had been taken by the previous regime as part of the interim rail budget, but its “implementation” was withheld till May 16.

Incidentally, in 2012, Modi had written a letter to then Prime Minister Manmohan Singh protesting the 20%  hike in rail freight rates. As Gujarat chief minister, he had not only protested against the rail fare hike, but also termed the move by the UPA government ‘anti-poor’ and ‘anti-farmer’.

The last rail fare hike took place in October 2013 when the passenger fares went up by two per cent and the freight charges increased by 1.7 per cent. Before this, railway minister Pawan Bansal had increased fares by 5-10% in June 2013.

June 23: Hike in sugar import duty

The Modi government announced that it will raise the import duty on sugar to 40 per cent from 15 per cent and will extend export subsidy of Rs 3,300 per tonne till September this year. Following the decision, the wholesale price rose by up to Rs 2 per kg to Rs 33.40.

June 30: Petrol and diesel price hike

The government increased petrol prices by a steep Rs 1.69 per litre and diesel by the expected 50 paise a litre.

Diesel rates were hiked in continuation with the previous UPA government’s January 2013 policy of raising prices in small doses every month to eliminate subsidy.

The last fuel price hike was announced on March 1 , when the petrol rates were raised by about 75 paise. However, during the Lok Sabha polls in April, the fuel rates were cut down by about Rs 1.74 paise. Prior to this, the petrol rates were revised upwards by 75 paise a litre (excluding State levies) with effect from January 4, 2014.

July 01: LPG price hike

Adding to the burden on the common man, the charges of non-subsidised cooking gas (LPG) was raised by Rs 16.50 per cylinder and that of jet fuel by over half-a-per cent, the first hike in six months. The LPG price hike was attributed to the surge in international oil prices due to the ongoing Iraq crisis.

The non-subsidised LPG cylinder, which customers buy after using up their quota of 12 subsidised cylinders, will now cost Rs 922.50 in Delhi, up from Rs 906. Last month, non-subsidised LPG rates were cut by Rs 23.50 per cylinder. A subsidised LPG cylinder in Delhi costs Rs 414.
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  1. A
    Ashwin Desai
    Jul 3, 2014 at 7:14 pm
    The long awaited Acche din will come or not we don't know. Peopleof India elected BJP expecting that if not BJP but Modi will do some magic forthe people of India, but today I can see that no steps have been taken to curbthe so called price hikes imposed on common Indian man. I think thesepoliticians and political parties are persuading common Indian towards a revolution.Looking at the conditions today it makes common people of India feels that allpolitical parties and politicians are from the same school of corruption orinsution.Where do we go??? the common m of India tries to forget betrayals ofpoliticians and political parties with their belief in their Gods, little bitof sadness is relieved by TV programs, movies and social gathering, Youth ofIndia today wants to live for today because tomorrow we never know what isgoing to happen and so on….. for all these the leaders and Politicians areresponsible.Today when we see chaos spread over the country for water, electricity andnecessary commodities it forces us to believe that that the earlier thug wasbetter than the current thug. Almost all the educated m of India electedBJP/ Narendra Modi with hopes to bring some relief to price hikes andcorruption but the reality is far away then the promises Narendra Modi/BJPmade.BJP justifies the same price hikes which it strongly opposed during UPA/Congresstenure, however BJP/Narendra Modi is using the same technique which Indianpoliticians have used for decades to fool Indian mes, i.e. first hike theprice and then provide a little relief.Today the price hike of necessary products are making the basic lives of peoplemiserable and the matter should be dealt as emergency or as utmost priority.BJP/ Modi government says that price hike is unavoidable for long termdevelopment and well being of the people of India, But it is a question of acommon man that if BJP know that the price hike was necessary why did it opposein first place and if BJP/Narendra Modi opposed it why they are following thesame policy of price hike now.However BJP & Narendra Modi should realize that theirfate will be worse than Congress government if they don’t really look in to thematters that are important and necessary for Indian mes.Hey Ram or O God or Allah…. people of India are forced to sighthis and think, will we really see a savior to save this country or O Al Mightyyou will keep on giving us this type similar jerks till we live.No wonder if tomorrow a politician issues a statement thatpeople should thank to the politicians of India because India does not have asituation like Iraq, Syria or any other war torn country.I don’t know when Indian politicians will understand that 60%corruption and 40% real work is widely accepted by Indian common m but howdo you expect us to accept 99% corruption and 1% of work???Is there any reality or everything in our country has becomea reality TV show….
    Reply
    1. D
      Devendra Sarda
      Aug 11, 2014 at 9:46 am
      People who voted for BJP are really disappointed .There is no vision for growth and employment and no will to eliminate corruption and high inflation.
      Reply
      1. H
        himanshu
        Jul 15, 2014 at 8:25 am
        I think you have to analyze govt intent on own rather than swallowing any article . Modi Govt responds well to the problem and they had taken some decisions and symptoms of those emerge with in year .
        Reply
        1. J
          Joseph R Stephen
          Jul 2, 2014 at 3:56 pm
          Then why did we vote BJP to power.Mr Modi should have his Tea meeting to explain to people why he cannot do it so easily.
          Reply
          1. M
            Madan Sharma
            Jul 15, 2014 at 5:53 am
            BJP has same constraints in restricting inflation what congress had. When congress failed to control inflation despite its best efforts BJP was most critical n gave an impression that there is policy paralysis which is responsible for the problem. It was of the view that there is no demand supply gap but there were other reasons responsible for the inflation which Govt is unable to manage. There is nothing new in BJP armoury. People of this country have no option but to wait for some time since the intentions of the Govt r good n it is sincerely trying to do its best.
            Reply
            1. S
              S
              Jul 16, 2014 at 6:14 am
              If you notice, inflation is mostly a ripple effect of increase in fuel prices, which are globally on the rise. Our best bet is to switch to alternative sources of energy and change our fuel consumption mix so that we can combat inflation and pollution at the same time. Would be great if we looked at waste management with a view to turning it into a fuel generating et and not as a problem. Big solutions lie in unexplored ideas.
              Reply
              1. R
                Raju Abraham
                Jul 3, 2014 at 9:45 am
                The rupee needs to be strong enough to get the food and other needed items for daily life as per the wages set by Govts. The value of money gone down many fold in terms of purchasing power parity. This will compell the working cl to do extra job to meet day to day expenditure for maintaining a family having 3 member instead of 5 member family concept. We need to cut down oil Import and explore inland production. If we could keep the oil price checked for containing price hike.
                Reply
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