Prime Minister Narendra Modi has requested the citizens to stop buying gold, avoid trips abroad, work from home, etc as austerity measure amid the US-Israel-Iran war.
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'Gather the pieces that are left over. Let nothing be wasted'
These days everyone is talking about austerity measures. Maybe it started with Prime Minister Shri Narendra Modi's appeal. Shri Modi made requests of citizens: to stop buying gold, cut down on cooking oil, avoid imported goods and trips abroad, use less fertiliser and work from home and avoid excessive fuel burning and use public transport.
Technically, these are not austerity measures. These are simple but crucial appeals from a leader who wants to lead the nation from the front. Some of them are wasteful expenditures.
Such appeals could have come only from a sincere Prime Minister. In my view, as citizens in our seventies - some of us could have made such an appeal. In Nagaland, any village elder could have issued that appeal. In other words, these are not restrictions or anything compulsory.
Implementing these appeals is only in the larger interests of the nation. It was all a pragmatic thing to do.
Our respected Shri Modi ji wants people to do what is in the larger interest of the nation. Hence, the panic button of a crisis is uncalled for. But at the same time we cannot look the other way when the world is confronted with a war, especially in a region that supplies oil across the globe.
In the given circumstances, we all should be worried about the impending challenges that may greet us in months and years to come.
As a nation, the Indian economy has done well no doubt. But we also know that the Indian economy is often a complex system.
Its operation depends on good monsoon rains and also that the oil prices are in check. So just to prepare well for a future crisis is a wise thing to do and the Prime Minister has rightly asked the nation to understand the gravity of the situation.
Car pooling and work from home are in other words good for the nation because in big cities, traffic congestion and pollution are major challenges.
Now, look at the other side of the coin. The US-Iran war and the resulting closure of the Strait of Hormuz have led to the Indian crude oil inventories experiencing a declining journey by an estimated 15 per cent.
Still the central government under the Prime Minister has handled things well. India is one of the few countries in the South East Asia that has not increased the prices of petrol and diesel for domestic consumers or rationed supplies.
The Oil Marketing Companies are today buying crude, gas and LPG at higher cost, but in order to protect consumers, they have been selling the final products at lower cost leading to massive mounting losses of up to INR 1,000 crore per day. Can we imagine the scale of it? In his appeal, the Prime Minister has also linked the global crisis to India’s agricultural imports, saying the country spends heavily on fertilisers sourced from overseas.
“Another sector that consumes foreign currency is our agriculture. We import chemical fertilisers in large quantities from abroad,” he said. Let us try to appreciate the fact that the Prime Minister’s appeal to reduce fertiliser use assumes greater importance because the government’s fertiliser subsidy bill reached a staggering INR 6.77 lakh crore between 2022 and 2026. This was driven by a pricing structure under which urea is sold to farmers at INR 242 per 45 kg bag while its actual cost is approximately INR 2,200.
Finally, the positive impact of Shri Modi ji's suggestions is likely to lessen the central government’s economic burden by plugging the outflow of foreign exchange.
The Prime Minister’s seven-point “appeal charter” should be viewed as sincere attempt to prepare citizens for a prolonged period of geopolitical uncertainty. It’s a practical step.
The economic challenges that we face the shocks likely to come will demand long-term structural reforms and we should be prepared for that as well.
M Chuba Ao
(The writer is BJP national vice president. Views are personal)