As the government of Prime Minister Narendra Modi completes six months, the common man has surely seen achche din when it comes to prices of essential commodities with a sharp fall in retail inflation from 8.28% in May to 5.52% in October 2014 with vegetable prices witnessing a major turnaround from a huge 15.27% to minus 1.45% in these months, according to Assocham study.
According to the study, the common man has also felt a great relief with regard to prices of cereals and products, fish, meat and eggs and milk and milk products in the last six months. The retail inflation of cereals and products has fallen from 8.81% to six%, fish -meat-egg from 10.11% to 6.34% and milk / milk products from 11.28% to 0.79% between May and October, 2014.
As for the middle class families, a major relief has come in the form of petrol and diesel prices. The fuel cost of running a car or two-wheeler has come down by 7-9% in the last six months.
However, there has not been good news for the industry since the industrial production and growth has been zig- zagging. In fact, the annualized industrial growth has slipped from 4.7% in May to 2.5% in September (latest data) even though there has been a huge improvement in the sentiment in the stock market which is betting on prospects of sharp improvement in the corporate earnings.
"It will be fair to say that while the common man has certainly felt a relief in terms of inflation, the overall economic development will need to be given much more push so that more employment is generated from which the common-man stands to gain," the Assocham study said.
Commenting on the performance of the six months of the NDA Government, chamber Secretary General DS Rawat said, "While inflation has come down, it throws a big opportunity for structural reforms so that the central issues of high inflation and low growth are taken care of. Then really would be life of a common man would improve considerably."
Also for now, a big fall in international crude oil prices has also helped the situation and brought in pots of luck for the government and the Indian economy. The prices of the Indian basket of crude oil prices in rupee terms dropped by 24% and by 28% in dollar terms between May 26 and November 24. Illustratively, the Indian basket crude was trading at Rs 6,330 a barrel in the global market on May 26. This has sharply dropped to Rs 4,835 a barrel on November 24.
According to the study since the prospects of oil prices going up remain dim in the near future along with other commodities, prices of essential commodities moved by the fuel costs would further come down making life more easy for the common man in the next six months. The annual account of the Narendra Modi Government should be even better.
However, the industrial growth remains a major challenge and the forthcoming Budget would be a deciding factor. "We only hope that the government is able to forge political consensus on the crucial reforms measures like increasing FDI in insurance and Goods and Services Tax (GST)," the chamber said.
