How the Congress was served a free hit and it missed the ball completely

The Congress has become adept at either missing opportunities or making a hash of them or both. In T20 terms it was recently served a free hit and it missed the ball completely.

The free hit opportunity is inflation because retail inflation is in its third consecutive month above the RBI’s upper comfort limit of 6%. Going by the RBI’s own prediction in its latest Monetary Policy Committee meeting, the April-June quarter is likely to see inflation just as high.

Add to this the fact that the coronavirus (Covid-19) pandemic has meant that income growth has largely become zero, if not negative, and you have a country-wide issue of utmost importance to everybody, especially the common man.

But what has the Congress been doing to derive political mileage from this? Twitter trends and ineffectual sloganeering in Parliament! How foolish can you be?

If it thinks that people care about what happens in either of those two forums, it might as well declare defeat already.

To be fair, the Congress has tried doing press conferences on inflation. The problem is, it is picking up points that are too esoteric for the common man.

A few days ago, the party spokespeople held a few press conferences citing a newspaper article that claimed that India’s fuel prices were among the world’s highest on the basis of Purchasing Power Parity (PPP).

True, but how many people understand the concept of PPP? In fact those who do can also point out the basic flaw in this argument.

Looking at prices on a PPP basis without also looking at incomes on a PPP basis and also comparing the relative quantities of fuel purchased per capita in different countries means that the analysis is incomplete and inconclusive.

The people who don’t understand PPP simply don’t care to find out. Free hit missed.

Predictably, the Congress won no new support from this line of argument. It’s anti-inflation campaign sank like a stone.

In general, what it doesn’t seem to understand is that people don’t care if prices in India are the highest or lowest in the world. They care whether they are spending more today than yesterday, by how much, and whether they can reverse that trend.

This is why the government is not especially concerned about the price of lemons going up to Rs 300-350 a kg. Demand for lemons is pretty elastic. People simply won’t buy lemons at this price.

Fuel, however, is another matter. Not only is demand for it pretty inelastic, fuel is one of those commodities that is linked to both expenditure as well as income. The average person cannot substantially lower their expenditure on fuel and so is stuck spending an increasing share of their income on it.

Farmers spend on kerosene for their generators for irrigation and urban commuters spend on transport to and from office. Neither group can cut their consumption for fear of also cutting their already-low incomes. They are running faster to stay in the same place.

The fact that petrol and diesel are almost Rs 40 per litre — yes Rs 40 per litre — more expensive now than what they were about a year ago is what the Congress needs to focus on, not an international comparison. This is a direct hit to discretionary spending and hence private consumption.

A more basic issue is whether inflation can any longer be made into a political issue. Both before the general elections of 2009 and 2014, inflation was very high. Yet it didn’t become an election issue.

In 2019 inflation was low, but in 2022 it wasn’t and yet in the five assembly elections held so far, it hasn’t been an issue.

So could it be that the Congress has understood this and is only making pro forma noises?