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Tomato, Milk To Fuel: How Inflation Is Battering Middle Class In India
Rise in fuel costs have increased the prices of nearly all the essential items because of the second-round effect. A rise in fuel rates typically impacts overall freight and transportation costs.
New Delhi: Prices of daily essentials, including tomatoes and milk along with edible oils and transport fuels, have skyrocketed across the country. The price rise has adversely affected the financial health of ordinary middle-class families in India.
According to a report by IANS, the trend has impacted the savings of even the well-off in the country. The biggest impact is the fall in purchasing power of the fixed income groups. They can now buy less compared to what they were buying earlier, the report says.
Sharp Rise In Vegetable Prices
- The rains in the southern states of Karnataka, Andhra Pradesh, Tamil Nadu, along with a rise in fuel prices have led to a sharp rise in the vegetable prices across the country.
- Media has been reporting daily about the rise of vegetable prices in various cities. For example, according to a report by indiatimes.com, tomato has crossed the mark of Rs 120/ kg in many cities.
- Rahul Kumar, 28, says that the rise in petrol prices exhausts his monthly income rather help him accumulate his savings. Rahul commutes to Noida on his two-wheeler, for his job.
- “The rise in petrol prices to above Rs 100 per litre, of tomatoes at Rs 80 per kg, besides ever rising rents could not have come at a worse time since we are already having pay cuts,” Rahul was quoted as saying by IANS.
Rising Fuel Prices Main Cause Of Worry
- Even when CPI-indexed inflation has come down to 6 per cent which is in the comfort zone of the Reserve Bank of India, some items of CPI and WPI, like fuel costs, have risen.
- Any rise in fuel costs bumps-up prices of nearly all the essential items because of a second-round effect. A rise in fuel rates typically impacts overall freight and transportation costs, a latest report in IANS states.
- Chabilal Das, a middle-aged daily essential supplier in Noida, told IANS, “The high spend on petrol due to exorbitant prices itself depletes my income. There has been no savings or investments for at least the last two years.”
Similarly, Anil Kumar, 40, a Delhi-based cab driver, told IANS that rising fuel prices have hurt his cost-to-income margins. “Rising fuel prices have hurt us the most as we need to pay EMIs of our vehicle loans, which becomes difficult due to a fall in real income. This pandemic has hit us hard,” Kumar was reported as saying.
Acuite Ratings and Research’s Chief Analytical Officer Suman Chowdhury, as reported by IANS, sees India’s headline inflation at 5.5 per cent for overall FY22 fiscal, and at 6 per cent in particular for Q4FY22.
“Some categories in the food basket have seen heightened inflation in the current year which includes edible oil, egg, meat and fish and pulses. Further, the sharply increased prices of petrol and diesel have also increased household expenditures with the unlocking of the economy,” he was quoted as saying by the agency.
According to an earlier report by IANS, the rising trend of the prices is expected to go on for a few more days. The consumers have to face the ultimate brunt.