INFLATION – A Major Cause of Inequality

It is stated that: “"Inflation is a disease, a dangerous and sometimes fatal disease, a disease that if not checked in time can destroy a society."And sadly it is a disease from which our country is suffering for many years. It is one of the major challenges before the Indian Economy to grow. It leads to the various side effects which chokes the entire economic system in the country.Despite the steps taken by the Government of India, It is not only persisting but the rate of inflation is skyrocketing.

The percentage of inflation in regard to price movements and the purchasing power of the rupee need to be evaluated on the basis of wholesale price index (WPI) with 1950-51 as the base year. Unfortunately, the government with the intention of preventing a factual comparison of the purchasing power of rupee, keeps changing the base year every decade, from 1950-51 to 1960-61, later to 1970-71 and finally to 1980-81.

Deficit financing in every five year plan and improper planning led to a 40 per cent rise in food grains, 45 per cent in cereals and over 70 per cent rise in pulses during 1961-1966. The country was in the grip of a galloping inflation. This with 1950-51 as the base year.

Keeping 1960-61 as the base year, the Fourth five year plan save the price index at an all time high of 331 in September 1974 (with 1961-62-100). This was due to a combination of several factors, the primary being the influx of refugees in large numbers from Bangaldesh and the expenses incurred by the government on them, failure of Kharif crops in 1972-73 and complete failure to take over the wholesale wheat trade. The declaration of Emergency in June 1975 resulted the arrest of price rise and a steep fall in inflation and prices of commodities.

Unfortunately, political upheavals, callous bureaucracy and an equally callous inflationary budget by the Finance Minister Mr. Charan Singh in 1979 brought all the good work reduced to nil and inflation back to an all-time high, and the election of a new government in January 1980 saw that inflation was taken up as top priority. However priorities in our country kept changing due to political considerations and the rate of inflation kept going up and being pulled back again. The 1980’s saw, by and large, a controlled inflation.

The 1990’s again saw the economy and inflation rate in doldrums with double digit inflation in 1990-91 and 1991-92. The political considerations in increasing the prices of food grains was one factor, the second being the steep rise in prices of petroleum products in one go. The inflationary pressure was mainly on food grains, vegetables, cereals, sugar and vegetable oils. Due to these factors, the galloping rise in prices continued for the better part upto mid-nineties.

Inflation has been defined in the literal sense as related to economic factors as “a progressive increase in the general level of prices brought about by an expansion in demand or the money supply or by autonomous increase in costs or the rate of increase of prices.”

Causes of Price Rise:

There cannot be any single cause for price rise of essential commodities continually over the years. In fact, over the years and even from the time of independence, there has been regular inflationary pressure on the economy partly through imbalance in demand and supply. The ever increasing demand has been primarily due to our ever increasing and bulgeoning population. Even a few decades ago it used to be around 12 to 14 million every year which has gone up to nearly 20 million every year.

This increase in population automatically creates an increased demand for food and essential commodities which results in a persistent gap between demand and supply in almost all consumer goods and services. It is indeed unfortunate that we have not been able to evolve a fixed and common norm to check the spiraling population, something which China has been able to achieve. Our politicians, monetarists and structuralists have chosen to ignore or underplay the effect of this growth on prices. India has several problems besides inflation, all affecting the citizens and creating more disparity between the rich and poor but no problem can be solved satisfactorily unless the growth of population is checked.

Mounting government expenditure over the years has also been responsible for inflation. The total expenditure of Central and State government in 1950-51 was about Rs. 750 crores only. This expenditure went upto Rs. 37,000 crores in 1980-81, further up to Rs. 5,80,000 crores in 2000-2001. Much of this has been non-development expenditure implying and increased in large money income in the hands of general public and stoking the fires of inflation. The populist measures of doubling and trebling salaries of government employees without implementing the rest of the recommendations of the Fifth pay commission has put an excessive burden on the exchequer without deriving any benefits from this.

Deficit budgeting is another reason for inflation. Mounting government expenditure financed through deficits directly pushes up money supply consequently pushing up demand. This has been responsible for the inflationary situation in the country with the State governments further adding to the problems through persistent financial indiscipline, reckless expenditures and unauthorized overdrafts.

Black Money:

There is considerable slush money with politicians and Government servants, mainly those dealing with licensing, registration, sales tax, trade tax, income tax etc. this slush money is used in real estates pushing up already high prices, extensive hoarding and black marketing inflation sensitive goods. The role of continual black money influx in creating inflationary pressures cannot be discounted.

Taxation and Wages:

The increased taxes in every budget gives an opportunity for corrupt traders to further push up taxes even beyond the levy. With fat pay packets, the higher salaried class and government services do not feel the punch what with dearness allowances applicable.

Procurement:

The policy of compulsory procurement by the government is another factor. With politics playing an important role in fixing procurement prices most of the time at unreasonable rates. This automatically leads to increase in prices of agricultural products.

The really serious effects of inflations are the distribution of income in india. Inflation has brought about a considerable disparity in income. The producers, traders and speculators have gained enormously through illegal gains, ever-increasing profits and windfall gains through black marketing, hoarding and speculation. But what about the working class in unorganized sectors – small establishments where wages remain constant despite continual increase in prices over the years. What about the persons living on past savings, fixed dogs, our Finance Minister has deliberately ignored them and in his latest Budget (2003) reduced interest on savings in post deposits earlier got 12 percent interest which means that earlier he was getting Rs. 12 thousand per year at the least on a deposit of Rs. 1 lakh but now gets Rs. 8 thousand or even Rs. 7 thousand per year only, this with the increased prices further reducing his purchasing power. The middle class has now been bifurcated into the border line, the lower and the upper middle class.

Inflation has brought about shifts in the distribution of income from the poor and weak to the powerful and rich. The rich have become richer and the poor have become poorer. Our democracy has the egalitarian welfare state incorporated in our constitution but has moved away from this avowed objective and instead created a situation where it has become responsible for increasing poverty and gross inequality of income and wealth.

Can illiteracy really be eradicated

Despite of growing at a decent rate for the past few years, India, the next superpower of the world has still got enormous number of problems to tackle. Government as usual claims that they are trying to iron out all the issues, but still, the people of India come across the loopholes every now and then. Look at this from the world's perspective; it gives a bad image to the nation and it’s an unending matter of shame for us. As an Indian I feel that not only the government but I also have got a big responsibility to start thinking about - how these problems can be resolved and how India can get a good position & respect in the world, which it deserves for last few centuries.

One of the major problems faced by a developing nation like India is the percentage of illiterate people present in the nation. Illiteracy literally means the inability to read and write a particular language, be it local or foreign language. More than 889 million people in the world are supposed to be literate. In order focus on increasing the literacy levels, United Nations Organization announced the year 1990 as International Literacy year. Analysis show that 60% of the adult illiterates are women and 98% of them are found in developing countries.

Many countries have started to expand their education programs in order to reduce the level of illiteracy. As regards India, the census taken in the year 2011 reveals that over 36% of Indian population are illiterates. The literary rates in youth is higher than the adults which is a consoling factor. But female literacy rates in India is lower due to various factors like child marriage and conservatism.

Some facts about different states literacy rate - Kerala is the only state in India to have 100% literacy rate. It is followed by Goa, Tripura, Mizoram, Himachal Pradesh, and Maharashtra, Sikkim. The lowest literacy rate in India is seen in the state of Bihar. We also need to think why is the literacy rate is low here in India compared to other developed countries. Basically the population in India is very high. Being the 7th largest country its population stands 2nd in the world after China. There are over 1 billion people in India. The number of schools and educational centers especially in rural areas is less. Even today many people are below the poverty line. Also people aren't aware that children should get free education according to the law.

To reduce illiteracy, various steps should be taken, not only by the government but each and every Indian should follow them.

-All the Indians should go to school without any compromise. The Government should make education free in all the government schools.

-Government should check that each and every family is educating their kids by sending them to the local school.

-We as citizens of India should tie-up with the Governement and volunteer to check all houses / schools in all the areas of the town once in 15-30 days. If any family is caught, who is not sending their kids to the school should be punished.

-Government & private companies should pay a good salary or incentives to the employees who are getting their kids a good / standardized education.

-The goverment should punish the MLAs / MPs if their region has low level of education or school going kids. Or even a single kid not going to school.

-All families in villages / small towns / shanties (like Dharavi) in big cities should be made aware of the rule.

-Government and we citizens should keep a target of 3 years to implement this project (meaning that every kid and uneducated person starts going to school). Uneducated adult through an evening school if he or she is working.

-All the teachers in Government and Private schools should have a minimum qualification and trained every 3 months (train the trainer concept). They should be paid well and should get incentives based on their performance and dedication.

-Celebrities / Politicians/ Corporate Honchos have to mandatorily spend 30 days (2 to 3 hrs a day) educating / doing guest lectures in schools and colleges. They should be given a certificate after their 30 days completion and it should be submitted by October 31st every year to a committee. If somebody from the listed fails to do the same he or she should be penalised and not allowed to travel out of India for 1 year.

Hence, by following these steps illiteracy in our country can not only be reduced but it can be eradicated.

Because in this present scenario INDIA DON’T NEED ACTS, INDIA NEEDS ACTION.

Alcohol: an unnecessary evil

The art of decadence and glamour in Bollywood includes flashing their well toned flesh and sporting a fluted glass of champagne while being draped seductively across a rich, hot, six pack, whisky drinking male. It is a kind of east-west clash gone wrong. Expensive alcohol is flaunted by the rich and famous as a sign of opulence. Alcohol is apparently a status symbol these days. Bollywood parties for the glitterati sport a vast array of alcohol being served to gold dripped stars. In the meantime, film of this is seen in every Indian home, influencing an untold number of young fragile minds.

Some well known stars of the media flaunt their regular habit of the potent rum in the form of  “Old Monk” as “sign of sheer coolness”. Clearly, no one has quietly whispered in their ear that potent alcohol consumption is the primary cause of impotence or perhaps that is left for the failed memories of closed door whispers during their drunken stupors.

The glamorising of alcohol may persuade the “cheek kissing lipstick” elitist brigade that their behaviour is acceptable, but it is a serious problem when it comes to the analysis of alcohol addiction. Those in the media’s eye often demonstrate recklessness and a complete lack of responsibility to society in general. Dysfunctional behaviour patterns are now the acceptable “norm” in a culture heavily influenced by Bollywood and the glitterati.

I have always been astounded at the number of Indians who assume that I drink alcohol just because I live in the west. On a cursory look at Facebook, many Indians think nothing of posing proudly with their designer shades and their vast array of hotel supplied alcohol. Others are at ease in flaunting their alcohol intake as a badge of honour of some kind. Is anyone actually thinking about what they are doing?

Am I therefore supposed to fit into the western stereotype depicted by Bollywood? I have a viewpoint on alcohol. Alcohol is not essential in anyone’s life. It is also extremely easy to make a decision not to allow our lives to be ruled by it.  You simply make a life-style decision. I prefer water to vodka no matter what the circumstances. I wouldn’t be any less “cool” for opting for this no matter what the others thought of me. I don’t think alcohol is something to be proud of at all.

It is accepted that these decisions are not easy when people are influenced by social and peer pressure. Moreover, it is the simpler to use alcohol as a crutch when psychological problems arise. A person’s demons and insecurity may be their weakness. Many will be oblivious to the risks of alcohol and will use it to medicate the stress in their lives. After all, if Bollywood uses it, what can possibly be wrong with it?  The fact is alcohol is toxic and it is not a solution to anyone’s problems. Sadly, this message has not filtered to the wider population where many insist on alcohol consumption as a requirement for socialising.

About 62.5 million people in India drink alcohol with a per capita consumption of around four litres per adult per year.  Approximately 25% of road accidents are linked to alcohol consumption. There is a hefty cost to the public purse - national spending to manage the consequences of alcohol use is about $5billion per year. People are free to drink whatever they wish, but has anyone considered the repercussions of indulging in these beverages? That is the real question.

Alcohol has the capacity of affecting every system in the body. Satyamev Jayate covered the subject of Alcohol Abuse very well. The detailed account of alcoholism written by Dr Ashish Deshpande is a “must read” for everyone.

One aspect neglected by people is its long term impact on mental health. While it may cause short term euphoria, the net effect of regular/long term alcohol use is detrimental upon a person’s mental health. So, women for instance, may drink regularly to medicate their stress, not realising that the net effect may well be depression leading to potential suicidal ideation. Alcohol can be a depressant and a disaster to people with underlying mental health issues such as stress, anxiety, mood swings, depression, bipolar affective disorder etc. It can also cause disturbing behaviour changes, disinhibition and aggression.

In 2009, the Lancet reported the changing trends in India’s consumption of alcohol. Subsequent studies demonstrated the social impact of alcohol abuse. In approximately 10% of households that have an inadequate supply of food and a habitual drinker, an estimate of 1500 Kcal per household per day for household consumption could have been obtained. Money that could go towards food, medication and education is frittered away to buy alcohol. Alcoholics tend to borrow money from village money lenders at high interest rates and often end up mortgaging their lands and assets.

Alcohol is also linked to domestic violence. Alcohol related aggressive behaviour is almost always directed towards women, who are further rendered powerless in an impossible situation. The World Health Organisation has suggested an increase in liquor price to curb violence against women [Times of India]. Another rising problem is that of fatal accidents owing to drink-driving [Remove liquor stores from along highways]. The government’s weak response is the proposed a “sin tax”. Will this be enough?

In a recent survey conducted by Community Against Drunken Driving [ CADD], more than 30 percent of young people admitted to having alcohol 2-4 times a week, while 54.1 percent of boys had their first drink between 15-16 years and 41.1 percent of girls initially consumed alcohol at aged 17-18 years. In the 1990s, people first tried alcohol at an average age of 28. CADD founder Prince Singhal told the Deccan Herald

“Young boys and girls start drinking at the age of as low as 12 or 13 due to several reasons because they think it is cool. On many occasions, it also starts at home where parents introduce their underage children to alcohol to bridge the generation gap or appear cool, failing to realise the harm they are causing,”. All this demonstrates that alcohol abuse is worsening in India. There are multiple reasons for this, but we should cast our eyes on the impact of the media and Bollywood.

The identity crisis of  Bollywood film or Indian TV is obvious. The worst of the west appears to have penetrated story-lines. The population is hooked on the never ending soap operas and glamorous factory manufactured films depicting a world of carbon copies. The portrayal of dysfunctional behaviour patterns includes excessive drinking. This spills out into the lives of the larger than life movie stars. It is fascinating that in the Bollywood world of dolls, obsessed by their slimline figures and “trendy” alcohol consumption fails to note its high calorific content [Times of India]

It is this imitation of life that is making its way from Bollywood to fracture the reality of people whose social lives just cannot sustain the price of alcohol addiction.  Dysfunction is now becoming normal behaviour.  It is interesting to note that a study presented this year at the World Congress of Cardiology demonstrated that Bollywood movies directly influence the drinking habits of India’s adolescents [American Medical Network]. There is little doubt that film and media influence the habits of the population, especially the younger generation. In terms of social responsibility, of course the movers and shakers should set a good example and play their part to improve India. Do they really want an India that fritters away their time and money on addictive substances?

Historically, Gandhi and the nationalist movements were against alcohol and referred to it as a symbol of colonial oppression. This resulted in a demand for prohibition. Prohibition was included as one of the directives of state policy. Sadly, this devolved to different states. It is notable that about 15-20% of their review is from alcohol taxation. The alcohol beverage industry influences politics. It is fascinating to note the frequency of “contributions to political parties in the form of inducements to voters during elections”. A few years ago, the Prime Minister flew in for his investiture ceremony in the private aeroplane of a prominent liquor manufacturer. [India- Alcohol and Public Health] . The selling of illicit liquor is another problem faced by the local authorities [Crooks Use Defence Tag to Supply Illicit Liquor].

A more serious problem is intoxication from bootleg alcohol. This is relatively common in India’s rural areas amongst the poorer classes. In 2011, approximately 126 died in West Bengal. In 2008, at least 107 deaths were recorded in Karnataka, with another 41 in Tamil Nadu. The following year, more than 100 died in Gujarat, where alcohol is prohibited. This problem has plagued the country for many years.

Aniruddha Mookherjee, who is writing a book about indigenous Indian alcohol told the BBC

"One reason is the huge unfulfilled demand for booze which drives supply underground into an unregulated industry. The state controls the alcohol business in India, almost completely. In many states, the alcohol is produced by state-appointed groups of people who are friends of the political parties that rule various states. West Bengal is one of the few states where this doesn't happen but in Delhi, for example, all alcohol is sold in government shops," he says. He explains the difference between the costs and ingredients of the different types of alcohol here.

Social responsibility is vital – we are all responsible for each other. It is high time the mainstream media and Bollywood used their clout to send a more positive message about the devastating bio psychosocial effects of excessive alcohol consumption. If Bollywood can influence a generation’s alcohol habits, it can reverse the process by thinking carefully about the message it sends out. Bollywood has a great power to do social good, something it fails to recognise or harness.

Despite the freedom to indulge in alcoholic beverages, each individual should “think” before they “act”. Every person would read the side-effects sheet of a drug, but no one reads about the side-effects of alcohol before they consume it. Moreover, being an adult  is all about adopting some responsibility – think before circulating pictures of yourself drinking alcohol. Could you live with the fact that someone under age may assume drinking alcohol was the right thing to do? Could you live with the potential consequences [that includes death] of subsequent reckless use of alcohol?

The escalating problem of alcohol abuse is having a detrimental impact on India’s public purse. It is also destroying innocent lives. Adopting a “Devdas” approach to problem solving is the most destructive thing anyone can do to assassinate their lives. If you have an alcohol problem, recognise it, seek help and make a positive change to your life. It is important to understand that those with a serious addiction to alcohol cannot just “stop” drinking on their own. This must NOT be attempted since alcohol withdrawal can prove to be extremely dangerous and in some cases fatal. In these circumstances, it is important to seek assistance from your local doctor and/or one of the organisations specialising in alcohol addiction.

Everyone has one life, it is important to live it not abuse it with toxins.