The increase in rail fares this week has gone through almost bloodlessly. So bloodlessly, in fact, that you worry if this is some deceptive calm before all hell breaks loose next week. But it won't. As it didn't when diesel prices were hiked substantially and a rude LPG cylinder cap introduced in September last year. Streets did not go aflame, and the departure of Mamata Banerjee from the UPA was an inevitable moment of liberation. The threatened Bharat Bandh, in spite of the Left and the BJP coming together with Mulayam, Mamata and Karunanidhi, was a flop like any other protest against fuel price hikes before this. The only places where it was visible were West Bengal and Kerala. But you can bring those states to a standstill even if you call for a bandh because Brazil did not win the World Cup. These states are ever so bandh-ready. I saw Kochi come to a pause as news came in that Saddam Hussein had been hanged and several parties had given bandh calls. I was, at that precise moment, floating as a tourist in Mattancherry, the heritage quarter of Kochi harbour. And was witness to the fact that the first people to pull the shutters down and join the bandh were the shopkeepers on the ancient Jew Street.
Consider some other recent user price increases. There have been heavy increases in bus fares in Tamil Nadu, Punjab, Karnataka and even Kerala. While all of us, particularly the pink papers, fret over the health of the power industry and state utilities, do you know how many states and union territories have hiked power tariffs in the past 12 months? It is 31. The average of this increase is a robust 16 per cent. Tamil Nadu has instituted the highest increase (37 per cent), and it was the state's first hike after nine years. And even the formidable DMK was not able to exploit it to rebuild its broken politics, it could only secure a tiny rollback. Kerala followed with a 30 per cent hike, Mumbai 28 per cent, Delhi 20, UP 17.6, Maharashtra 16.5, and Punjab and Himachal 12 per cent. Two facts need to be underlined here: Delhi saw some protests, mostly not from the poor or the middle classes, but the Resident Welfare Associations (RWAs) of the pampered South Delhi colonies. No wonder the Kejriwal bijli-jodo campaign ended so abruptly: there is no sympathy for power thieves any more, as there is none for corrupt netas. Second, Himachal, which announced one of the lowest increases, of 12 per cent, rolled it back indirectly by announcing a subsidy cushion after some protests in the election year. But why is tiny Himachal so important?
The government panicked and subsidised some of that increase, hoping it would make the voter happy. Just as, following the same, stale, old-school politics, it presumed that the Centre's LPG cap, “suicidal” so close to the Himachal elections, would win it a second term. The BJP built a campaign around LPG and rising prices, and threw in an imaginative freebie as well: free induction heaters. And what was the result? It got thrashed. That is why tiny Himachal is important. Because it tells you Indian voters are moving on. And there are real economic and social reasons behind this welcome change. Himachal, for example, has a very high percentage of government employees, and now, with the rise of some industrial areas (Baddi, in particular) in the plains and foothills, also a growing population employed in the organised sector. These can be described as VDA-Indians. VDA stands, obviously, for Variable Dearness Allowance, which rises at quick, often quarterly, intervals with the price index, giving this growing population an inflation hedge.
This, the increase in the number of Indians employed in the organised sector, is the reason why these price hikes have been absorbed. Last week, the IITs increased their tuition fee by 80 per cent. Did you see thousands of parents march to Rajpath? Our airlines have fully established the principle of fuel surcharge, thereby protecting themselves from wild increases in crude prices. The only complaints you have seen were from some in the media. Planes are full.
Welcome, then, to this pragmatic new India. Where some in the middle classes are VDA-hedged, and others have seen their incomes grow so fast they can pay more for better services rather than insist on sarkari freebies. Of course, the poor are in a different category altogether. But the sad truth is, most of the poor do not benefit from these subsidised prices. Our subsidies mainly go to the middle classes, and the rich. For the poor, the basics, foodgrain, fuel, and even power tariffs, are protected at the low levels of consumption they can afford. The only people protesting, in the cocktail circuit and on TV channels, are the rich. For them, subsidies are an entitlement and a status symbol, and not a necessity. Go to the petroleum ministry website that now has a truly sensational list naming each individual subscriber and how many subsidised LPG cylinders they have been using so far. Look at the centurions: they are all members of your political and financial A-lists. There has never been any voluntary movement, any offer, and mobilisation, on the part of the really rich, or powerful, like our ministers, MPs, even judges of higher courts, to say they willingly give up even the six cheap LPG cylinders as an undeserved subsidy. But what do you expect from elites who will be outraged if you just removed that obscenity of a signboard at every highway toll plaza listing those exempted from paying a piffling toll? How you wish that one day, a Chief Justice of India will take the lead and voluntarily give up at least that one privilege. He wouldn't even need a PIL to pronounce on that.
But we are digressing. The basic point is, the Indian voter is changing for the better. She wants to be delivered better services and goods and with greater dignity, and won't mind paying more for them. It is for the leaders now to understand this welcome change and build a new politics around it, fuelled by aspiration, growth and performance, not mere freebies as in the past.
Fully endorse that we must pay for what we use. Has n't much credit been given to the worried PM for reforming our economy? And has n't the worried PM had more than one opportunity to correct state of the State, the last of the opportunities having already lasted good 8 years... Now Sir, is n't that good enough reason for us to worry now? And is the Indian voter really changing for better? Proud to pay?? Since Mr Gupta invariably likes to lace his pieces with personal anecdotal gems, let him share with us, does he use a petrol or a diesel SUV/car? If it is the latter, Indian voter is yet to change, albeit the concluding paragraph of his piece may.
The common man will also agree to pay for democracy (state funding of political parties) only if they promise to fight coruption wholeheartedly.
First, Himachal wasn't won on a development plank but infighting on one camp led to the dismal performance of the BJP combine, on the other hand VBS is a mass leader under whom no leadership has emerged. Secondly, public utility pricing in India is tragic for want of a better word. Himachal has been giving subsidy on electricity and so do other states, and for a state which has a surplus energy this was a natural step. Critical question here would be to come out of state directed pricing but move towards market led pricing.
Prime Minister and President, if request, RBI' Team of Economists for R&D efforts to study in application for a parallel Islamic Economy and Islamic Banking, enshrined in Qur'an, a holy guidance by God, Sole Creator of universe and mankind, which is anti-thesis of exploitative interest-based economy could prove a solace to our economy. A good experience in pipeline.
Amazing; Shekhar Gupta talking the language of N.Modi and the old C. Naidu. But the whole argument seems to assume that inflation is good for everyone. It is not. For fixed income people like senior citizens with no pensions, and the poor. Inflation affects the consumption basket of the poor also and more severely so.And it becomes worse when new jobs are not created.Don't mistake the voters' fatigue.Prices have been continually rising for the last 5/6 years, so as per your logic the voter should be always on the streets protesting rather than worrying about his daily bread.As a well wisher why don't you advise the PM about the root cause of the monstrous inflation?
The author is absolutely on the dot. There should be no subsidies for the fat cats of the world. Once the Direct Benefit Programme (pilot in 20 districts is on) is fully in place, let the subsidies be given to the poor and the deserving. One of the advantages of paying higher prices (as determined by the market mostly) is that the people would tend to be less profligate and more disciplined in their spending.
While the point about the changing nature of people's response to the prices going up is an interesting one, I am not too sure people would take kindly to just prices going up and the quality of the servieces remaining static or going down. I don't think Indian Railways can demand extra prices without improving on their horrible track record in terms of ensuring the quality of servieces. Don't think the middle class would take it easy that so much of corruption is happening and only they are forced to pay up. The Prime Minister should be worried about many things, not just about real prices for the services. If he takes enough meaningful steps to ensure the quality of these provided services, then fair enough. Who in their right frame of mind would want to take an Air India ticket when there is another option available, even if at a higher price? Dr. Singh should focus on delivering quality services, then the people would pay up for the good quality.
The author is absolutely on the dot. There should be no subsidies for the fat cats of the world. Once the Direct Benefit Programme (pilot in 20 districts is on) is full yin place, let the subsidies be given to the poor and the deserving. One of the advantages of paying higher prices (as determined by the market mostly) is that the people would tend to be less profligate and more disciplined in their spending.
Mr. Gupta, Though I admire your views and articles on Indian politics, I feel that this article does not really convey the real picture as to the spirit (if I may use this word) in which the common man of India takes to rising prices. On the one hand, we are constantly fed with stories of corruption, black money, flamboyant lifestyles of people in power.. and immediately, on the other hand, do we learn about an increase in tariff of a basic utility service. How do you expect the public, at large, to digest it with maturity and acquiesce to it, when all it does is just fuel the frustration more? The public have become mature enough not to resort to bandhs and violent means but that does not imply that they have become an ever-tolerant group of people of the rising prices.
This is intelligent provoking piece by Shekhar Gupta.In the analysis of cost of protest,what the writer misses is that poor(not an income tax payer) in India via indirect tax structure pays more then the filthy rich.Rich and prvidged like King Fisher MD , Vijay Mallya choose to pay to temples then clear the salaries of workers. Expressions in shape of public protests shall be encouraged more to bring in the poor class in the Protests initiated by paid privileged middle class who can afford to stop work for few days to protest and bring the sick service system to stay alive to 99% demands.
paying more will only be like giving subsidy to the inefficiencies of the system... Aadhar scheme, direct cash transfer, etc all IT-related schemes bite the dust, why? coz they are Transparent and Effeicient. Now babus woudnt want that would they??
If the average citizen is now more willing to move towards fair, market driven prices that governments have long subsidised, much of the credit should go to economic growth that has put more money in her purse.
It is articles like these that makes the governments believe that they are doing a good job. Your argument misses the affordability part of it. People dont protest not because they accept it but because there is no friggin' use as not a single politician listens to us.
This is exactly Mr.Narendre Modi did in Gujarat- No free electricity; I am surprised that you have not mentioned about his actions! May be Modi's decisions are NON SECULAR!
The article reflects editorial arrogance and bias of the highest order. I would like to ask Mr Shekhar Gupta when was the last time he voluntarily one of his privileges. For some reason, Mr Shekhar Gupta seems to detest the urban middle class. Give them a break Mr. Gupta..they probably for the core readership of the English edition of the Indian Express - once a fine newspaper, now turned into a rag. As to you castigating the TV panelists - don't you realise that you are one of them? And that only people with certian biases and views get invited to participate in those stupid shows..which unfortunately today pass for journalism. Mr Shekhar Gupta..the people of India...rich poor, in-betweem - don't mind economic pricing of goods..but they abhor the waste and corruption. Ithink it would be stupid to volunteer to pay more taxes, if that sacrifice is going to end up in the pockets of politicians!