As inflation continues to rise in India due to the Russian invasion of Ukraine, experts are raising concerns like child marriage and female infanticide. Even, the chief minister of Jharkhand Hemant Soren recently said if inflation is not controlled, the cases of female infanticide and child marriages will soar in the entire country.
Soren expressed his concern and said that campaigns like ‘Beti Bachao Beti Padhao’ will be finished as people will not have money to provide education to their daughters, he said while addressing the State Assembly last month.
Notably, India's annual wholesale price-based inflation accelerated to a record 14.55 per cent in March as compared to earlier month's 13.11 per cent, according to the government data. Also, India's retail inflation figure for March 2022 came in at 6.95 per cent, a 17-year high.
Child marriage is one of the most common practices in poor countries and is generally focused on among the poorest households. The major reason for these activities is linked with poverty and low levels of economic development.
For several families with limited resources, child marriage is seen as an easy way to provide for their daughter’s future. However, according to several reports, females who marry young are more likely to be poor and remain poor.
"The intuition for the relationship between inflation and malnutrition is clear. An increase in food inflation will result in real incomes going down, which will increase demand for inferior goods or substitution away from food that provides nutrition," said Dr Bornali Bhandari, Senior Fellow, National Council of Applied Economic Research (NCAER).
Bhandari added that this will result in increases in child malnutrition. A decrease in real incomes and employment opportunities for adult caregivers may drive child marriages too.
Meanwhile, the rate of inflation based on the wholesale price index (WPI) food index increased from 8.47 per cent in February 2022 to 8.71 per cent in March 2022.
"Although the specific socio-economic concerns raised by Soren may require empirical support, there is nonetheless no doubt that inflation does adversely hurt fixed income groups and in particular, the poorest of the poor even more so," said Dr Sashi Sivramkrishna, Adjunct Professor of Economics, Narsee Monjee Institute of Management Studies, Bangalore.
Sivramkrishna added that in spite of the efforts of successive governments to address the societal bias against women, the girl child still remains most vulnerable when it comes to absorbing the effect of real income shocks on poor families. Consequently, Soren’s concerns cannot be dismissed as implausible.
According to the data, the food index consisting of 'food articles' from the primary articles group and 'food Products' from the manufactured products group has increased from 166.4 in February 2022 to 167.3 in March 2022.
"We're well and truly part of the global economy where finally the common man is impacted by happenings, not just locally but across the world. The economic repercussions play a larger role in how society functions," said Akshay D'Souza, Chief of Growth and Insights, Bizom, a retail intelligence platform.
D'Souza said that in the first Covid-19 Wave, the common man's livelihood got hit due to sudden and unprecedented lockdowns. Imagine, earning nothing suddenly. There was heavy dependence on government and external support as they couldn't make ends meet.
"However, many urban poor folks who left their villages couldn't get adequate external support. The additional cost of living and no livelihood meant that they had to reduce spending and get back home to their villages. An almost 50 per cent spike in less than a year on key edible oils didn't help," D'Souza added.
Challenges and solutions:
"To economists, however, Soren's remark actually reveals one of the most difficult dilemmas facing policymakers across the world: the trade-off between inflation and unemployment. The pandemic and more recently, the ongoing Ukraine war has disrupted global supply chains, which not only raise the costs of production in several sectors but also constrain output," said Sivramkrishna.
With governments having no choice but to increase their spending in order to support the economy and employment, increased aggregate demand has only fueled inflation further. With the increased spending by the government, growth rates in India seem to be stabilizing at around 7 per cent but even so have only recently crossed 2019-20 GDP levels, according to Sivramkrishna.
"On the fiscal front, policies at deficit consolidation would no doubt control aggregate demand but will come at the cost of clipping a nascent recovery and chances of restoring a high growth trajectory. At the same, with a recovery in private sector investment still dependent on higher capex spending by the government, fiscal prudence cannot be a viable option. Moreover, any slowdown in growth rates will only exacerbate the unemployment situation, which ultimately impacts the poor most adversely," said Sivramkrishna while talking about solutions.
According to the experts, the Reserve Bank of India raising interest rates to control inflation is going to dampen demand across the board thereby affecting India’s growth rate and unemployment situation.
"Perhaps the only immediate and viable option for the government in these challenging times to manage the trade-off between inflation and growth as well as employment is to continue supporting the most vulnerable and worst impacted sections of the population with targeted food distribution and other welfare schemes," said Sivramkrishna.
Meanwhile, the ministry in a statement said that the high rate of inflation in March 2022 is primarily due to the rise in prices of crude petroleum and natural gas, mineral oils, and basic metals, owing to disruption in the global supply chain caused by the Russia-Ukraine conflict.