Price rise and highest inflation rate is likely to be among the key issues in Telangana Assembly elections, slated to be held in November-December this year.
While the ruling Bharat Rashtra Samithi (BRS) is likely to corner the Bharatiya Janata Party (BJP) over the high inflation rate, the ‘world’s costliest’ LPG and steep hike in fuel prices, it may come under attack from the latter and also from the Congress over Telangana recording the highest inflation rate consistently among all states.
The BJP is likely to hit back at BRS for not reducing Value Added Tax (VAT) on petrol and diesel to pass on the benefits to the customers despite several states slashing VAT.
The BJP leaders may also cite the fact that Telangana has been witnessing inflation ratethat is consistently the highest among the states.
The Congress is likely to blame the policies of both the BJP and the BRS governments for the price rise. While attacking the BJP over the skyrocketing prices of fuel and LPG, its leaders may also slam the BRS for not reducing VAT on fuel and failing to check the high inflation.
According to the Economic Survey 2022-23, Telangana logged the highest inflation rate in the country. The state had an inflation rate of 8.7 % between April and December 2022, in contrast to the national average of 6.8 %. Inflation in the rural areas of Telangana was higher at 9.2 % while in the urban areas, it was 8.3 %.
For March 2023, it was7.63 %, almost 200 basis points more than the national average.
BJP leader Amit Malviya attributed this to high taxes on fuel and a broken Public Distribution System (PDS), which is meant to feed the poor.
Telangana has one of the highest fuel taxes in the country. The transportation of goods and services is costlier. Higher housing and commercial rentals are also adding to the inflation.
Experts say the high inflation rate may push up the cost of living, hurting Telangana’s competitiveness vis-a-vis other states in attracting investment.
Aiming for a third consecutive term in power, BRS may go all out to attack the BJP for burdening the common man with steep hike in prices of diesel and petrol.
Over the last few months, the BRS has been targeting the BJP over the issue of price rise. In March, BRS working president K.T. Rama Rao had demanded the BJP-led Union government to apologise to the nation for skyrocketing fuel prices.
In an open letter, he had stated that the Central government is looting the public by citing international crude oil prices as the reason for the fuel price hike, but their “deceit” has been exposed.
“In 2013, when the cost of one crude oil barrel was USD 110, the cost of one litre petrol was INR 76. Now, when the cost of one crude oil barrel is USD 66, the cost of one litre petrol is INR 110,” KTR had pointed out.
He also accused the Centre of fleecing the poor and middle-class public by increasing prices.
“Due to the 45 % hike in fuel prices since 2014, all the essential commodities have become costlier,” he said.
The BRS leader said that due to the rise in diesel prices, the state governments are forced to increase public transport charges and the public transport system is on the brink of a crisis because of the Central government.
He also said that inflation is at a 45-year high due to the failures of the Union government.
KTR did not agree that bringing fuel under the purview of GST would reduce prices.
“The LPG cylinder price, which is under GST, has been hiked from INR 400 to INR 1200, making it the costliest LPG cylinder in the world,” he said.
A few months ago, the BRS organised huge protests over hike in LPG prices.
Finance Minister T. Harish Rao alleged that the BJP has almost lifted the subsidy on cooking gas.
During the UPA regime, the subsidy was INR 2.14 lakh crore, but after the BJP came to power, it reduced the subsidy every year and it has now come down to INR 37,209 crore, he said.
The minister recalled that the price of domestic cooking gas cylinder in 2014 was INR 410.50 which has now gone up to INR 1,155.
“In nine years, the price of a cylinder has increased by INR 744.50, marking an increase of 178 % during this period,” he said.
The BJP leaders may counter this criticism by pointing to the fact that Telangana has one of the highest taxes on fuel.
They also point out that the Centre reduced petrol prices twice, but the Telangana government has not reduced VAT on fuel. Petrol and diesel prices in Telangana are among the highest in the country.
The rising input costs for agriculture is also likely to be an issue during the elections. Farmers are struggling to tackle this issue. They say that the increase in input costs is wiping out the investment support they get under Rythu Bandhu.
The state government is paying INR 10,000 per acre annually under the scheme. Many farmers complain that a huge jump in input costs is pushing them into losses every year.
The increase in prices of seeds, fertilisers and other inputs has hit the farmers hard. As most of the farming has become mechanised, the rise in diesel prices has come as another big blow for the farming community.
Due to the high cost of labour, many farmers are unable to hire agricultural labourers.
In this context, the BRS government’s recent move to waive agriculture loans up to INR 1 lakh may help it win the support of farmers by providing them some relief, said political analyst Palwai Raghvendra Reddy.
The KCR government on August 14 had announced that it will waive farm loans of less than INR 1 lakh of over nine lakh farmers. The government spent INR 5809.78 crore for this purpose.
After assuming power for a second straight time in 2018, KCR had made the promise of waiving loans of farmers who took crop loans of less than INR 1 lakh by December 11, 2018.
However, due to the Corona pandemic, the ensuing lockdown and the consequences of demonetisation in the country, the government faced a big difficulty in mobilising the resources.
On August 2, KCR decided to complete the loan waiver in 45 days. The government paid INR 1943. 64 crore to the banks in respect of 7,19,488 farmers who took loans up to INR 50,000.
Fresh orders were issued to settle the debt amount up to INR 99,999.
With the latest decision, the government has paid INR 7,753 crore, benefiting a total of 16,66,899 farmers.
