• Mon. Jan 17th, 2022

The New Year Gift by the Modi Government to all of us is New Inflation: Amee Yajnik, MP, Rajya Sabha

Rajya Sabha MP of Congress Amee Yajnik on Sunday, January 2, at Rajiv Bhavan Guwahati lashed out at the BJP-led Central government and said ‘new inflation’ is the New Year’s gift to the nation by the Centre. According to the Congress spokesperson, the new inflation refers to the high unemployment rate observed in the year 2021. She called the BJP a synonym for inflation and said that both are a threat to the country.

In a press statement Congress Rajya Sabha MP mentioned :

Modi Government gift:

On the first day of 2022 Modi Government gave a New Year gift to all of us in the form of Inflation 2022. This new inflation is coupled with a consistently high unemployment rate above 7.5%+ during most of the year 2021.

The inflationary pressure is mounting, with November 2021 WPI at 14.23%, which is at over 10 years high, and its impact is likely to be felt more imminently in the New Year going ahead. As we usher in the New Year, be prepared to spend more on basic items of daily use- what to say about goods of luxury. From buying clothes and footwear to withdrawing our own money from ATMs is going to be expensive.

Clothes to get more expensive – 

Finished goods such as apparel and textiles are set to get more expensive from January 1, 2022, with the Union government increasing the GST on such items from 5% to 12%. The GST rate on apparel costing up to Rs 1,000 per piece has been hiked from 5% to 12%. Also affected by the same hike are rates of textiles, including woven fabrics, synthetic yarn, blankets, tents, and accessories such as tablecloths or serviettes.

Due to the opposition of the Congress Party and the Congress-ruled states and fearing an impact on the elections in 5 states, this increase has now been postponed till February 28 in a hurry. This date may get extended by 1 month due to elections. It may be worth to note that the decision was not reversed- it was postponed. This tax will be imposed again on the people as soon as the elections are completed.

Amee Yajnik, MP, Rajya Sabha also described the impact of the above –

• Over 15 lakh jobs in main and ancillary units would be lost because of raised GST and therefore unviable increased cost of production.

• Because the unorganized sector accounts for over 80% of fabric production in the country, raising the GST on fabrics to 12% will hurt power loom and handloom weavers’ business and employment.

• Due to extraordinary price increases in raw materials like yarn, packing materials, and freight, the market will likely experience a 15-20% price increase in clothing. Individuals who purchase clothing for less than Rs 1,000 will be the most affected.

• According to the garment industry, 85 percent of the clothes sold are priced below ₹ 1000.

2. Footwear to get more expensive –  

•The GST rate on footwear (costing up to Rs 1,000 per pair) has also been hiked from 5% to 12%. One of the most frequently mentioned issues in the community is the high inflation, prices of vegetables, and FMCG (Fast Moving Consumer Goods)essential goods that people buy, and now if GST rates are raised on the apparel and footwear sectors, it will further strain household budgets.

•It is also worth noting that the incremental revenue for the Government may also be limited because many small businesses that were in the informal sector before GST may revert to their previous status. The imposition of high taxes has already created an atmosphere of uncertainty for consumers and manufacturers. One therefore wonders as to what is the logic behind this decision.

3. FMCG (Fast Moving Consumer Goods) Prices will increase by up to 10% –

•The price of FMCG consumer goods will increase by 6 to 10%. Be it Dabur, Parle, Britannia, Marico or other companies, everyone is raising the prices of everything from biscuits to soap.

4. Withdrawing our own money from ATM will be expensive –

•RBI has approved to increase the charge on cash withdrawal after free transactions. According to RBI, banks will charge Rs 21 from their customers after  free transactions. 

5. Booking Auto Rides Online to Cost More –

•Be prepared for auto rickshaw rides booked through app aggregators like Ola and Uber to get costlier. The Government will levy a 5% GST on auto rides booked online from January 1, ending an existing exemption.

6. Buying a car or automobile will be expensive –

•In the New Year 2022, we have to pay a higher price to buy cars from almost all car and auto companies, including Maruti Suzuki, Renault, Honda, Toyota, and Skoda. Auto companies will increase prices due to an increase in cost. Tata Motors had already announced to hike commercial vehicle prices by 2.5% from January 1, 2022.

7. Cement prices to rise to ₹ 400 per bag –

•In 2021, cement prices increased by 15% – 20%. The condition is that a 50 kg bag of cement sold for ₹ 330 / ₹ 340 a year ago is now in the process of crossing ₹ 400.

8. The price of steel will continue to increase –

•Steel companies increased steel prices by 215% between 2020 and December 2021. In November 2021 alone, steel companies raised steel prices by ₹3000- ₹3500 per tonne. This trend is going to continue in 2022. Reason being absence of competition in the steel industry, thereby resulting in impetus to unscrupulous monopolies. Now it is in the hands of a handful of companies – Tata Steel, Jindal Steel, and Arcelor Mittal Steel. There is a silent consent of the Modi government in this regard, prices are rising, and people are suffering.

9. India Post Payment Bank increased the charge –

India Post Payment Bank (IPPB) account holders will have to pay a charge for withdrawing and depositing cash over a specific limit from January 1st. Cash withdrawal 4 times every month from Basic Savings Account will be free. After this, 0.50% charge will have to be paid on every withdrawal.

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