Gas subsidy signals inflation as key plank for upcoming elections

A fortnight after Prime Minister Narendra Modi promised from the ramparts of the Red Fort to minimise “the burden of inflation” on the people, the government on Tuesday announced a subsidy of Rs 200 on each cooking gas cylinder.

The government said the decision “will bring respite to households across the nation” and “ensure access to essential commodities at reasonable rates”.

Inflation significantly contributed to the defeat of Congress-led United Progressive Alliance in 2014, but it remained largely absent from the narrative of the 2019 Lok Sabha polls. The government’s move suggests that inflation could emerge as the critical plank on which the December Assembly polls to five states and the 2024 Lok Sabha elections might be fought. A recent Lokniti-CSDS survey indicated that inflation, unlike 2019, is increasingly becoming a concern for people.

Modi termed his Cabinet’s decision an Onam and Rakshabandhan gift for his sisters, two days after Shivraj Singh Chouhan, chief minister of poll-bound Madhya Pradesh, announced his “rakhi gift” of providing LPG cylinders at Rs 450 each. On June 12, at a public meeting in Jabalpur, Congress leader Priyanka Gandhi Vadra “guaranteed” making cooking gas cylinders available at Rs 500 if it were to form the government in the state.

On June 5, the Congress government in Rajasthan rolled out its Indira Gandhi gas cylinder subsidy scheme to provide 12 cooking gas cylinders a year for Rs 500 to those registered under the PM Ujjwala Yojana and all below poverty line families.

Rajasthan CM Ashok Gehlot allocated Rs 1,500 crore for the scheme in the February 10 Budget for an estimated 7.6 million beneficiaries. It has pledged to deposit the difference between Rs 500 and the price of the cylinder in their bank accounts within a month of the purchase.

The Rajasthan government also runs “mehengai rahat camps”, or inflation-relief camps. The Congress won the Himachal Pradesh polls in December 2022, where it promised Rs 1,500 monthly allowance to women, while it pledged Rs 2,000 a month to each woman head in Karnataka.

In MP, it has promised Rs 1,500 for women as “support” for the price rise. Chouhan on Sunday said his government would now pay Rs 1,250 allowance to women between 21 and 60 years of age. In Karnataka, the Congress campaign used LPG cylinders to symbolise price rise.

At least since May, after the Bharatiya Janata Party (BJP) lost the Karnataka polls, the PM has frequently spoken of his government’s record in reining price rise. Addressing the BJP polling booth workers on June 27, days after his return from the US, Modi compared the rates of a 50 kg bag of urea in the US, Brazil, China, Bangladesh, and Pakistan and said it was the cheapest in India at a mere Rs 270 a bag since his government subsidised it. He has also often said data in India is one of the most affordable.

In her address on the eve of Independence Day, President Droupadi Murmu said inflation at the global level remained a cause for worry, but “in India, the government and the Reserve Bank have effectively managed to contain it”.

Opposition leaders said the Cabinet decision was the “fear” of their INDIA (Indian National Developmental Inclusive Alliance) bloc. Congress leader Jairam Ramesh said two successful INDIA meetings in two months and the third coming up in Mumbai in two days influenced the government’s decision.

“The Congress government in Karnataka has implemented its five guarantees in 100 days. The Rajasthan government is giving LPG cylinders at Rs 500. The response has been phenomenal as people were hurting from the BJP's misgovernance,” he said, adding that the decision comes with the BJP staring at a certain defeat in the five Assembly polls, and is “literally clutching at straws" six months before the Lok Sabha polls. "Expect more such 'gifts' in the coming months as the prime minister becomes even more desperate to cling to his chair."