In 2014, the BJP’s campaign rhetoric often invoked the “Mehngai Dayan” — the witch of inflation — as a symbol of the previous government’s economic mismanagement. Ten years on, inflation remains a stubborn feature of Indian life. Between 2015 and 2024, annual inflation averaged 5.8%, spiking to 9.63% in 2019 before easing to 3.53% in 2024. Yet headline numbers mask a harsher truth: the essentials that matter most to ordinary households — food, fuel, education, healthcare — have all seen steep price rises.

Petrol prices jumped from ₹71 per litre in 2014 to over ₹105 in 2022, before settling around ₹98 in 2024. LPG cylinder costs more than doubled in the same period, from ₹414 to ₹1,100, with subsidies covering only part of the gap. This happened despite periods of falling global crude prices, suggesting domestic tax policy, rather than supply shocks, is driving a big share of the pain. Excise duties on fuel were hiked multiple times, triggering a ripple effect on transport, food, and manufacturing costs.

Food inflation has been volatile and punishing. The price of staples like vegetables, cereals, and cooking oil spiked by up to 60% during pandemic years, and again in 2023 due to erratic weather and supply disruptions. The government’s PMGKAY free ration program offered short-term relief to the poorest, but failed to tackle inefficiencies in procurement, storage, and market regulation — the structural levers that could keep prices stable.

Education and healthcare, two of the largest recurring costs for families, have become more expensive as well. School materials — from notebooks to pencils — carry GST rates of 5–18%, a silent contradiction of the constitutional guarantee of affordable education. Healthcare costs have risen sharply; essential medicines have seen price hikes of 20–60% in the past five years, and private hospitals, unbound by strict regulation, continue to charge as they please.

Layered on top of inflation is a tax structure that feels heavy yet unrewarding. India’s tax-to-GDP ratio remains at 11–12%, lower than richer nations but sustained by a disproportionate reliance on indirect taxes like GST. These taxes hit poorer households harder because they pay the same rates on essentials as the wealthy. The GST rollout simplified compliance in some respects, but its design — taxing school supplies, medicines, and sanitary products — runs counter to social equity.

Income tax slabs, meanwhile, have been largely stagnant. The new regime under Section 115BAC offers lower nominal rates but removes most deductions, often leaving middle-class taxpayers no better off. Compared globally, India taxes high incomes more aggressively than many peers without offering equivalent public services. In Singapore, the top marginal tax rate is 15% for incomes around ₹10 lakh; in the U.S., the federal rate for incomes up to ₹74 lakh is 22%. In contrast, Indian earners cross the 30% bracket at ₹10 lakh, with additional cesses and surcharges.

Fuel taxation is a case study in how indirect levies quietly drive up living costs. Petrol and diesel remain outside GST, allowing both the Centre and states to pile on excise and VAT. These not only inflate transport costs but also cascade into higher food and manufacturing prices, contributing to the very inflation the government claims to fight.

Despite high and growing collections, public service delivery remains anaemic. Roads are potholed, government hospitals understaffed, and schools underfunded. The absence of a strong independent fiscal body to link tax rates with service benchmarks means citizens see no clear return on the taxes they pay. In high-tax, high-service countries like Denmark or Sweden, citizens get universal healthcare, free education, and robust infrastructure in exchange for their contributions. In India, high taxes coexist with a low-service reality.

This combination — rising living costs, heavy indirect taxes, and underperforming public services — creates a quiet but persistent erosion of household wealth. GDP growth figures and stock market rallies mean little to families who find their monthly budgets stretched thin by petrol prices, school fees, and medical bills.

Addressing this will require more than temporary subsidies or headline tax cuts. It demands a rebalancing of the tax system to reduce reliance on regressive indirect levies, targeted tax relief for essentials, and a credible link between what citizens pay and the quality of public services they receive. Without this, India risks locking itself into a cycle where growth is celebrated on paper while real living standards stagnate or decline.