Double trouble for common man
Call it the big squeeze. Barely a fortnight ago, the RBI hiked the interest at which it lends to banks - or the repo rate - by 0.25 percentage points to tame inflation, the 13th time in 19 months, causing instalments on home loans go up yet again.
Call it the big squeeze. Barely a fortnight ago, the RBI hiked the interest at which it lends to banks - or the repo rate - by 0.25 percentage points to tame inflation, the 13th time in 19 months, causing instalments on home loans go up yet again.
Costlier borrowings have prompted consumers to defer purchases of goods such as cars that are mostly bought on loan.
The RBI also had a strong message for everybody in its quarterly review of the monetary policy: Prices will remain high, at least in the near term.
Overview
Latest price data only corroborates the RBI warning.
The food inflation rate grew to 12.21% in the week ended October 22, the sharpest increase in nine months, the data on Thursday showed.
The UPA government and the Reserve Bank of India (RBI) are facing a dilemma of striking a balance between growth and price rise. The string of measures to reduce inflation have hurt growth, raising the risk of plunging the economy into a slowdown.
The prices of vegetables and fruit jumped by 28.89% and 11.63%, respectively, on an annual basis. This pushed up overall prices, which had risen by 11.43% in the previous week.
Milk went up 11.73% and eggs, meat and fish by 13.36%.
Delhi
Mithilesh Narang (64) Retired school principal
Husband: Retd CA
Lives with son, daughter-in-law and three grandchildren
Is inflation pinching you?
We have to make every purchase after considering it thrice. The situation was comfortable four years ago.
What are the discretionary food items you spent on earlier?
We have cut back on fruits and expensive vegetables. Earlier we bought fruits every second day. Now we do it once a week.
Have you cut spending on
Movies: No
Shopping: No
Eating out: The last time we went out was a year back.
Parlours/toiletries
Others: The only outings we have now are weddings.
Have you had to downgrade, defer or forego a holiday?
We have not planned a family vacation for the last 2 years.
Have you reduced household expenses by opting for
Public transport/car pool: We have reduced the use of the car and use the Metro more often now. "When I bought my car in 1960s, petrol costed Rs 1.5 per litre. I know prices cannot remain the same but salaries have not risen as much as the prices in the last five years," said DM Narang, Mithilesh Narang's husband.
Cutting down on electricity consumption: No
Entertaining less: No
Have you deferred purchase of
House: We were planning to add a new floor but, we don't think it will be possible now.
Car: Not Applicable (NA)
Television: NA
Music system: NA
Furniture : NA
Other high value item: NA
Mumbai
Kirti Phanse (31) Housewife (Gives tuitions)
Husband is country manager with a private hardware firm
Lives with two children. Son is in school, daughter a toddler
Is inflation pinching you?
Yes, unimaginably. In the last four to five months, we have started feeling the pinch, as we have had to make tremendous cuts in spending.
What are the discretionary food items you spent on earlier?
We have reduced spending on items such as cheese and paneer, cold drinks and other snacks. We wanted to cut down on milk too but we didn't because my two children need milk nourishment the most.
Have you cut spending on
Movies: Yes
Shopping: Yes
Eating out: Restricted
Parlours/toiletries: No
Have you had to downgrade, defer or forego a holiday?
We have ensured that we go for a family outing within India once a year and we do not intend to forego that.
Have you reduced household expenses by opting for
Public transport/car pool: I take the local train now
Cutting down on electricity consumption: NA
Entertaining less: NA
Have you deferred purchase of
House: NA
Car: We have been wanting to buy a car for the last one year but I think we will have to give up on it
Television: We had planned on buying a LCD television but now I have forgotten about it.
Music system: NA
Furniture : NA
Other high value item: NA
Chennai
Sumati Parama (45) Housewife
Husband is a shopkeeper
Lives with two sons, one in college and another in class X
Is inflation pinching you?
The price rise does not match the rate of increase in income, so we are becoming poorer.
What are the discretionary food items you spent on earlier?
None, as it is the most essential thing in life that contribute to our health.
3. Have you cut spending on
Movies: Yes
Shopping: Yes
Eating out: Yes.
Parlours/toiletries: NA
Have you had to downgrade, defer or forego a holiday?
We used to go to Andaman Islands every year and we used to fly. Now we take the sea route, which is cheaper.
Have you reduced household expenses by opting for
Public transport/car pool: No
Cutting down on electricity consumption: No
Entertaining less: Yes
Have you deferred purchase of
House: Renovation on hold
Car: NA
Television: LED on hold
Music system: NA
Furniture : NA
Other high value item: NA
Chandigarh
Charanjeet Kaur (35) housewife
Husband is a businessman
Lives with two daughters, one is in school and another is 3 years old
Is inflation pinching you?
Surviving on a single earning is becoming impossible.
What are the discretionary food items you spent on earlier?
I have cut down on quantity of the purchases. My husband is very fond of pastries, cakes which I have almost stopped buying.
Have you cut spending on:
Movies: Yes
Shopping: Yes
Eating out: Restricted
Parlours/toiletries: Restricted
Have you had to downgrade, defer or forego a holiday?
Planning a holiday in such time is completely out of question.
Have you reduced household expenses by opting for
Public transport/car pool: Yes
Cutting down on electricity consumption: Yes
Entertaining less: Yes
Have you deferred purchase of
House: Yes
Car: Yes, given the rising price of petrol
Television: NA
Music system: NA
Furniture : NA
Other high value item: NA
Lucknow
Manjari Mishra, (50)
telephone operator, BSNL. Husband is div engineer, BSNL
Lives with a daughter and a son. Daughter is studying B.Tech, and son is in Class XI
Is inflation pinching you?
The salary has marginally increased. It is really pinching us hard.
What are the discretionary food items you spent on earlier?
Luxury items like butter, cheese, chaat masala and special masala are off the list.
Have you cut spending on:
Movies: Yes
Shopping: Yes
Eating out: Restricted
Parlours/toiletries: Restricted
Have you had to downgrade, defer or forego a holiday?
Going out-of-station is now limited to marriages and functions that too only the very important ones.
Have you reduced household expenses by opting for
Public transport/car pool: Yes
Cutting down on electricity consumption: Yes
Entertaining less: Yes
Have you deferred purchase of
House: NA
Car: Yes
Television: LED TV
Music system: NA
Furniture : NA
Other high value item: Cannot purchase jewellery
Kolkata
Sunita Ray (50) housewife
Husband is head assistant tax collection, municipal corporation
Lives with two daughters, son and a brother in law
Is inflation pinching you?
I walk to the local market to buy my vegetables and fruits.
What are the discretionary food items you spent on earlier?
Have cut down our intake of tomato, carrots, capsicum and beans.
Have you cut spending on:
Movies: NA
Shopping: Yes
Eating out: Restricted
Parlours/toiletries: No
Have you had to downgrade, defer or forego a holiday?
Yes
Have you reduced household expenses by opting for
Public transport/car pool: Yes
Cutting down on electricity consumption: NA
Entertaining less: No
Have you deferred purchase of
House: NA
Car: NA
Television: NA
Music system: NA
Furniture : NA
Other high value item: I needed to buy a water purifier and a geyser, which I have deferred for a few months. I need to save a little more now.