When it comes to politics, inflation is no longer what it used to be

There is near total political silence around inflation with neither politicians nor their parties caring to take it up

The recent action by the Reserve Bank of India (RBI) has once again focused attention on a peculiar thing that has been happening since 2004.

Inflation is no longer a political issue or at least, not as potent an issue as it used to be. Politicians and their parties no longer care to take it up — even though the CEO of a top consumer goods MNC in India says he has not seen inflation like this in 30 years.

Look at the prices. Food and fuel prices have been galloping along. So have the prices of a whole range of goods, albeit at a canter. But gone are the days when politicians and their parties mobilised public opinion around it by holding demonstrations etc. Indeed, there is near total political silence around inflation. All that we hear is an occasional bleat.

It’s been like this for a long time now. I recall how in 2008 and 2009 people used to persistently remark on increasing prices and then wonder why the opposition was so quiet. Then came the 2014 election. The preceding three years had seen food prices increase by over 50 percent, especially pulses and edible oils.

Yet, if you recall the BJP's campaign, inflation was mentioned only in passing. Narendra Modi, its chief campaigner and prime ministerial candidate, promised development, instead.

By the time of the 2019 general election, inflation had been tamed, and it wasn’t what they call a ‘hot button’ topic. So it was barely mentioned.

But the question nevertheless remains: has inflation lost its potential to damage a government? If so, why?

One explanation given in 2008-09 was that since incomes, too, had been rising since 2001, the voter wasn’t too upset if the household consumption budget had to be slightly modified. That was true.

And it was still true in the 2014 election. Incomes, if not rising at the same pace as before, were still rising. The previous three years hadn’t hurt very much, or at least not so much as to neutralise Mr Modi’s charisma.

And in the following three years, thanks to a variety of factors, not the least of which was the sharp fall in international crude oil prices, inflation ceased to be even a talking point even though by then even nominal incomes had actually begun to decline. People were earning less in real terms than before.

Then came demonetisation which brought unprecedented levels of pain to the informal sector. This has been followed by a further and very sharp reduction in real incomes due to two years of Covid-19 and the accompanying inflation.

One would have thought the voter would punish the government for what was entirely its fault. Instead, the BJP has only become stronger.

The BJP seems to have effectively replaced inflation with nationalism and its Hindus-first policies. Religion as Marx said, has truly been shown to be the opium of the masses. Add to this the direct money transfers to the poor and the delivery of minimal amounts of grains, pulses, cooking oils, and the sharpest edges of inflation have been blunted.

But this may be changing now. Price rise when incomes are also rising is one thing. But when incomes are not rising, and actually declining, it’s a different matter altogether.

The main brunt of this is being felt in urban India where nearly 40 percent of voters reside now. Their overheads — rent, transport, communication, education, health and entertainment now account for nearly 85 percent of their income.

It’s up to the opposition to start campaigning on this issue so that they manage to raise the pitch by 2024. Whether they will do that remains doubtful however, considering that the opposition comprises leaders only and not followers.