The better-than-normal rains so far this year may herald a good harvest, but for now, people across Mumbai are paying more than ever simply to get by.
In the last three months, vegetable prices alone have risen fourfold. Expect worse.
Hoteliers want to hike rates. As do taxi and auto unions after the hike two days ago in the price of compressed natural gas, which powers Mumbai’s buses, taxis and autorickshaws. The BEST calculates its fuel bill will go up by Rs. 13.60 crore annually.
City-based consumer organisations say household expenses have gone up by at least 25% even after cutting down on use of vegetables average prices of which have shot up from Rs. 20 a kg in March to Rs. 100 or more now.
Economists don’t have good news on the inflation front. “Diesel and other administrative price hikes will keep an upward pressure on WPI [wholesale price index] inflation, especially with the weakening of the rupee. A good monsoon would help but it is still too early to say whether we will have a good monsoon,” DK Joshi, chief economist, Crisil, told HT.
Says Anuradha Deshpande, managing committee member of Mumbai Grahak Panchayat:
“The average budget of a family of 4-5 persons has gone up by a minimum of Rs5000. The government asks us to eat nutritious food but is even basic food affordable today?”
The long-term view may be a bit better.
“A calibrated diesel price hike will trim deficit, cushion the overall impact on inflation and discourage consumption and coupled with a good monsoon we would see a healthy growth in agriculture, which in turn will help in pushing GDP growth,” says Soumya Kanti Ghosh, chief economic adviser, State Bank of India.