While a beleaguered Union government as well as state governments are preoccupied with tackling healthcare problems exacerbated by the Covid-19 pandemic, such as shortage of hospital beds, shortage of vaccines, blackmarketing of essential medicines, resorting to hard measures like lockdowns and other restrictions on citizens, the Centre seems to have taken its eye off two disastrous developments on the economic front – a rising inflationary price spiral and growing unemployment. In fact, the second element – growing unemployment along with salary cuts — has exacerbated even further the impact of the first element – inflation — as the lower middle class and low-income groups are being crushed under the impact of both these disturbing developments, that too in an environment under the cloud of the pandemic.

In fact, even before the pandemic struck, consumer inflation had crossed the upper tolerance level of six per cent (prescribed by the Reserve Bank of India) in December 2019. India was in a tight spot, with inflation higher than the mandated figure but with economic growth falling fast to a rarely seen low of around 3 per cent.

The situation during the pandemic turned even grimmer. During the course of the pandemic, when inflation numbers in most countries eased to around 2.9 per cent as per analysts with the Asian Development Bank, India did not see a number below 6 per cent, apart from the two months of April and May 2020 when the consumer price index was imputed from limited data. During the disastrous month of April 2021, when the second wave of the pandemic hit the country very hard, the wholesale price index shot up by 10.49 per cent – the highest spurt in the last 11 years. Today, tens of millions of low-income and poor households have been grappling with a cocktail of economic woes. After the coronavirus disrupted India’s economy, leading to increased unemployment and wages being slashed, and rendering daily wagers penniless, a sustained period of higher food inflation is now pushing millions of families to cut back on food expenditure, threatening a spell of nutritional poverty, especially malnutrition among children.

As households dip into their savings because of either stagnating or no running incomes, economists warn that India’s gross household savings could decline further, thereby denting future consumption and jeopardising economic recovery. This could lead to a lowering of investor sentiment as India’s consumer market would get narrower with constricted household savings. For instance, global investors would be discouraged from putting their money in a market where consumers have less disposable cash to spend, thereby leading to reduced investments in new projects which would in turn dampen job creation.

Granted that the government’s time has been taken up in tackling pressing demands like hospital beds and shortage of oxygen and medicines. While this is absolutely essential to save as many Indian lives as possible from the ravages of Covid-19, the issue of galloping inflation and the desperate financial condition of millions of people should not be ignored. On the contrary, the government is further aggravating the situation by continuously hiking the prices of petrol and diesel, which can have a knock-on effect on the prices of many items of consumption. One fails to understand why, at a time when more and more people are being pushed below the poverty line, the government has stopped supplying free foodgrains to the poor and why it has not reduced the unbearable tax burden on automotive fuels. In fact, fuel prices can come down immediately if petrol and diesel are included in the GST. If the Centre does not take the obvious remedial measures at the earliest, the ruling party will have to a very high electoral price for not showing a humanitarian spirit, and on the contrary administering a heavy blow to low-income groups and other poor people in the country