In an almost split screen moment, the month of March has seen India’s leadership, from the Prime Minister to the Union Finance Minister and others in the government say there is no LPG crisis, no need to panic, and no threat to the economy. In parallel, the world has seen images of snaking queues of Indian citizens waiting to have their LPG cooking cylinders refilled and reports of a sharp escalation in the cost of cooking cylinders.

The two sides have now aligned it seems as the Prime Minister now likens the situation to a COVID-19-like event.

Fairly early in March, more than four hundred ceramic units in Gujarat’s Morbi halted operations. Migrant workers across these ceramic and textile units are now making that same fraught journey home that they did during the pandemic. In West Bengal, the Darjeeling Tea Association warned that tea estate factories in Darjeeling are facing a severe LPG shortage that could halt operations at tea gardens employing 55,000 workers. In the early days of the LPG crisis, hotel associations had already flagged that almost a third of hotels and restaurants were downing their shutters, owing to a near complete halt in the LPG supply from distributors. In Uttar Pradesh, FIRs were registered against 12 LPG distributors, while 74 others were booked for alleged malpractice.

It seemed odd that FIRs were being filed at such a rapid pace and allegations of malpractice were flying around, in the face of a seemingly “normal” state of affairs, such as the government earlier said.

Framed differently

But this is old news; the past few weeks have seen a reluctant acceptance of the seriousness of the situation. By likening the event to a global pandemic, the government and its leadership are quickly setting the frame for an “external event” impacting India, where the country’s leadership has no real role to play aside from calling for calm. How do migrant workers and lower income households stay calm where there is no food that can be cooked, or wages to be earned in order to purchase an LPG cylinder—whose cost is snowballing as we speak.

But let’s return to comments from just a few weeks ago. Finance Minister Sitharaman tamped down any nervousness around the impact of a war in Iran on India’s growth. “India’s economy stands at a position of strength; we are able to manage things well,” she said. “We faced COVID-19, supply disruptions from the Russia-Ukraine war, and many other shocks, yet we maintained balance in our economy”. Essentially, the Finance Minister believes India has been here before and we will coast through this crisis.

Her optimism has unfortunately for India, failed to be proved right. And if indeed this is a COVID-19-like crisis, not only has the government made this an “it’s not us, its them” problem pointing to the conflict in Iran, they have also indicated to ordinary citizens, people are now in this alone. And unsurprisingly, this as well, is not new.

Let’s count back further. The most debilitating blow to India’s small traders and informal economy came in the form of demonetisation. It ripped apart a fabric that had existed for many decades and supported the flow of goods and the running of small businesses. Barely had we recovered from that, when COVID-19 hit the world and India with force. With one of the most stringent and punishing lockdowns, India’s poor, both rural and urban, but especially migrant workers saw their income and jobs vanish, in many cases never to return.

India emerged from the crisis with a strong tilt towards rural employment, both in the form of MGNREGA dependence and labour choosing to move back to their village and work on farmland.

It didn’t end there. High household inflation and low household savings created an ecosystem of higher household debt, especially for lower and middle income households. One only has to look at the current state of the stock market and the automobile index that has nosedived more than 11 per cent in the last month; the companies are bracing for a collapse in demand, having only just dug themselves out of a hole in the two-wheeler and entry-level car market.

Let’s be crystal clear. This is not a Russia-Ukraine war. And this is not a state of balance. India is vulnerable on every front—access to LPG for cooking gas, employment and remittances that come in from West Asia, a geopolitical bind where we are friends with all but influential with none. As early data on India’s manufacturing output shows, this is hitting both the manufacturing and services industry, with the additional blow of sharp transmission into future inflation numbers.

Self-reliance in energy sector?

The Prime Minister speaks of the self-reliance India has achieved in the energy sector, ensuring that the country doesn’t have to rely solely on foreign sources for energy. Let’s also be clear about what that self-reliance looks like. The State Petroleum and Natural Gas Minister Suresh Gopi himself says India’s strategic oil reserves are designed to provide cover for about nine-and-a-half days of supplies during disruptions. India imports about 60 per cent of its LPG and 90 per cent of that makes its way through the Strait of Hormuz. Only a handful of cargoes have made it through since the strait closed. This is a fraction of daily demand.

Since the Prime Minister has likened this phase to the pandemic, let’s track what has happened since then to the country. India’s economy has been doing two things—demonstrating growth and demonstrating deep economic inequity.

We will now see that gap grow even wider, this time with possible damage to the middle income households as well. So no, these are not ordinary times and ordinary measures will not be enough. Given that stress is visible in both India’s rural economy, where green shoots were visible, and in labour intensive industries, where work has been shuttered, we are indeed at serious risk of repeating a COVID-19-like situation.

The difference is this. We have been here before, through the demonetisation crisis and through the migrant crisis of COVID-19. Which means that if the Central government is serious about navigating its people through this period, it has—or should have, both experience from two other crises and a strategy on how to manage this crushing blow to its most vulnerable.

In the ancient Roman calendar, the Ides of March are associated with misfortune and doom. In his play Julius Caeser, William Shakespeare writes of a soothsayer warning Caesar to “beware the Ides of March”. When Caeser notices the soothsayer in a crowd he boasts, “The Ides of March are come”. “Ay, Caesar; but not gone,” the soothsayer replies.

Mitali Mukherjee is Director of the Journalist Programmes at the Reuters Institute for the Study of Journalism, University of Oxford.

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