UPA’s ‘Mehngai Dayan’ Was Bad, But NDA’s Is Worse

UPA’s ‘Mehngai Dayan’ Was Bad, But NDA’s Is Worse

The BJP had spent a significant part of its campaign targeting the UPA-II over rising inflation. ‘Mehngai Dayan’ (Inflation Witch) is what the BJP had then termed the rising prices of essential products.

As India enters July 2021, the first major news of the day was the hike in the price of domestic LPG cylinders. Domestic cylinder weighing 14.2 kg, with the hike of Rs 25, will now cost Rs 834.50 in Delhi. Petrol prices in several cities have crossed the Rs 100/lit mark, while Diesel prices are inching closer towards the century. On the other hand, citing higher input costs, India’s largest dairy brand Amul has spiked its milk prices by Rs 2 from today.

The incumbent NDA, which had won the 2014 general election, had a significant part of its campaign targeting the UPA-II over rising inflation. ‘Mehngai Dayan’ (Inflation Witch) is what the BJP had then termed the rising prices of essential products. A song with the same name from the movie Peepli Live had then caught the imagination of the Indian middle class, which wanted to oust the Congress-led government over inflation.

The narrator of the song says: “Sakhi Saiyaan to khoob hi kamat hai mehngai dayan khaye jaat hai (“O friend, my husband earns a lot, but this witch called inflation keeps eating it all).”

However, after 7 years of the BJP-led NDA’s rule, citizens are left to wonder whether these were the ‘Ache Din’ (Good Times) that the party promised during the 2014 election campaign.

Despite this, many in the saffron party, including its keyboard warriors on social media, keep pointing fingers at the mismanagement by the UPA, which they say is resulting in rising inflation.

In this article, let us look at the peak inflation during the UPA-II and compare it with the current situation. It will help us understand if the BJP’s charge of the Congress being responsible for this mess is right, or whether the UPA handled the economy better than the BJP.

Fuel

At the infamous peak of fuel prices during the UPA-II rule in September 2013, Petrol was selling at Rs 76.06 per litre in the national capital Delhi. Diesel, in Delhi, was selling at Rs 51.97 per litre. The falling rupee and firming international oil prices were the major reasons for the record hike in fuel prices. At that time, a barrel of crude oil imported by the country cost $109.4 to the exchequer. Meanwhile, a dollar equaled Rs 63.29. Fuel prices were cumulatively raised by Rs 4.75 from January to September 2013.

On July 1, 2021, i.e. today, a litre of petrol in Delhi costs Rs 98.81. Diesel, meanwhile, is being sold at Rs 89.18 per litre. However, the prices of crude oil in the international market have fallen drastically since the UPA-II rule, and a barrel is now reportedly sold at $76.01. The value of the Indian Rupee has fallen since then and now stands at Rs 74.54 to the dollar. Fuel prices have cumulatively increased by Rs 13 from January 2021 till July 1.

Notably, the gap between petrol and diesel price has also reduced in the last few years. The gap of 24 odd rupees in the year 2013 has now been reduced to 9 odd rupees.

It clearly indicates that the prices of fuel were cheaper during the peak UPA inflation despite the high cost of crude oil in the international market. Whereas, in spite of a barrel of crude oil costing almost $30 lesser than what it cost during the UPA rule, the fuel prices at present cost 20 odd rupees more than that in September 2013.

The reason behind this baffling equation of prices is the difference between taxes charged by the government during the UPA and the NDA rule. These taxes were raised last year as the pandemic dried up other revenue sources for the government. The elevated taxes kept fuel prices up in India even though crude oil prices had crashed and stayed low for much of 2020.

(Credit: Livemint.com)

LPG Cylinders

LPG (Liquified Petroleum Gas) is a byproduct of natural gas and oil extraction and crude oil refining.

The highest price at which the LPG cylinder was sold during the UPA regime was in late 2013 and early 2014 when 14.2 Kg domestic cylinder in Delhi cost Rs 414. As stated earlier, crude oil prices in the international market back then stood around $109. LNG (Liquified natural gas) from Qatar in the international market reportedly cost $5.97/ MMBtu in February 2014.

After the hike on July 1, 2021, a domestic cylinder weighing 14.2 kg will now cost Rs 834.50 in Delhi. Meanwhile, the crude oil price in the international market stand at $76.01/ barrel, while the LNG price in May 2021 was $3.72/ MMBtu.

Despite the significant fall in prices of the LNG and crude oil since the UPA-II, the prices of the LPG cylinder have almost doubled in these years.

The reason behind the higher cost of 14.2 kg LPG cylinders, despite the reduction in the international LPG prices, is the halting of the subsidies by the BJP government for the LPG on retail price.

LPG domestic cylinder price has been hiked by Rs 25.

Edible Oil

Just yesterday, the government reduced basic customs duty on crude palm oil to 10 per cent, which will help bring down the edible oil prices in the retail market.

In March 2021, the rate of sunflower oil was Rs 2400 to Rs 2500 per 15 kg. The rate of Soybean oil was Rs 2000 to Rs 2100, the rate of palm oil was Rs 2050 to Rs 2100 and the rate of groundnut oil was Rs 2500 to Rs 2600 per 15 kg can.

Comparatively, in late 2013, the rate of sunflower oil was between Rs 1000-1100. The soybean oil cost in the same range. The RBD palm oil was around Rs 900-950. The groundnut oil in the same period was selling at Rs 1340-1350 per 15 Kg tin. However, it had declined after the peak rate of Rs 2250 in January 2013.

Palm and soybean oils account for 86 per cent of India’s total edible oil imports. Malaysia and Indonesia are the biggest global exporters of palm oils, and prices in these countries have raced up in the past year.

Edible oil prices have skyrocketed in the last year.

Mehngai ‘Dayan’ Or ‘Darling’?

As fuel prices race beyond Rs 100/litre, the prices of other FMCG/essential goods have also increased owing to the transportation costs. Milk and vegetables are also selling costly, eating up the already hampered pockets of the middle class due to the pandemic.

The inflation, which the BJP referred to as a ‘Dayan’ (witch) during the UPA-II era, seems to have suddenly become a ‘darling’ for the saffron party, say opposition party leaders. Often called a nationalistic government that could sway the public mood at any given time over the issues of national security and Hindutva, the NDA presently looks grappled by the high prices of commodities and services. The charges of Covid pandemic mismanagement have also dented the image of the ‘strong’ Prime Minister- Narendra Modi.

The NDA needs to remember the promise of ‘Ache Din’ (Good Times) and figure out ways to control the damage caused by the inflation.


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