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.