Sunday, June 8, 2008

Reality bites

India imports more than 70 percent of its crude oil requirements paying a hefty price at the international market. A lion's share of our hard-earned foreign reserves is spend just for procuring crude oil. So far governments at the centre were unwilling to pass on the higher prices onto the general public for fear of losing support and votes. But now the situation is fast changing.

The Indian government has now announced a massive hike in petrol, diesel and lpg (/cylinder) prices by 3, 5 and 50 rupees respectively (see the chart).

This hike will soon get reflected in higher prices of essential commodities and services. The pinch can be felt now itself. Lorry rental rates have shot up by 75 per cent. In many parts of Kerala auto rickshaws are charging Rupees 10 extra to min charges. Bus fare would be increased soon (bus operators have called for another strike to press their demands). Rice is not available in plenty and the available quantity costs a fortune now. Grocery items and vegetables are hard to come by at affordable prices.

Living is becoming quite difficult in Kerala and elsewhere in India. Inflation is showing up in its true magnitude and colours. What we're going to do?

We are investing. Where? On capital intensive projects and real estate. Plan allocation for agricultural sector is paltry compared to other investments. What would we give for people to eat when they feel hungry? Auto parts and Steel utensils. Well, if mankind has progressed to that extent then, great.

If you think that money that can be gotten through increased exports and that the bulging foreign reserves would come to handy when we need to import food then you're wrong. Wrong if you take into account the ground realities.

Our population is fast rising, our food production is actually on the decline in relative comparison to increase in our population, monsoons are becoming un-predictable, more agricultural lands are being used for non-agricultural purposes, inflation rate is increasing, dependency on exports increasing and what not...

On the whole, the picture is not rosy, though many are painting it in rose for optimism-sake. There was a time when one could buy a litre of petrol for just Rs.28.30 in 1999, if my memory is right. Now a litre of petrol costs double that amount. Tell me a single commodity which has seen a reduction or for that matter a stabilisation in regard to prices. Nil. The situation is going to become worse. Worse than what one can imagine.

The funny thing is that much of this was forecast, years before. That time we didn't pay attention to it. NRI's might find solace in the fact that these issues doesn't have an immediate effect on them. But in reality, they are the ones who pay a much bigger price than their fellow citizens in India. Many of them are working hard in distant parts and adverse climes of the world so that they may have some good quality life back home when they return.

But when they return what might welcome them in their motherland is economic shocks of a different magnitude that would redefine their lives. Or what else do you expect when you need to shell out a considerable sum just for leading a normal life-style: Rs.20 for a kilo of tomatoes, Rs.18 for rice (not the basmati one), a normal GP visit for Rs.150 and more, Rs.250 school fees, and so on.

Don't ask me how much you need to save (or how much less you should eat and spend) for buying a few cents of land and building a house?

If you see this in a different perspective you would not miss one major causative for this devastating impact on our lives: The rise in population. If we can address this issue on a war-footing level then much adverse impact can be softened and lessened. There lies much scope for hope and improvement in our lives.

Human resources are indeed a great resource and a source in itself, but with certain qualifications. We need to realise and appreciate that its the quality that matters, not the quantity.

No comments: