Inflation spurs fair price shop sales

The rising cost of living is hurting lots of people. Surging food prices have shrunk the purchasing power of many households, prompting millions of Indians to buy up to three times or more of subsidised staples—rice and wheat—from government-run fair price shops, a new government study has shown.

Updated on: Jan 25, 2013, 24:19:15 IST

Hindustan Times | By Chetan Chauhan, New Delhi

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The rising cost of living is hurting lots of people. Surging food prices have shrunk the purchasing power of many households, prompting millions of Indians to buy up to three times or more of subsidised staples—rice and wheat—from government-run fair price shops, a new government study has shown.

The National Sample Survey Office (NSSO), in its latest report on Wednesday, reported a 2.5 times jump in the sale of government-subsidised wheat in rural areas between 2004-05 and 2009-10. The sales of such wheat soared three-fold in urban areas.

The increase in case of rice was not so dramatic but was also steep.

Experts attributed the rise in sales of subsidised food grains to the growing difference between market prices and ration shop prices.

“High procurement of food grains for the public distribution system have pushed up the retail market prices,” said Pranob Sen, former economic advisor to the Planning Commission.

India’s overall consumer price inflation – which captures shop-end prices, making it a fairly realistic cost-of-living index – rose 10.56% in December—up from 9.90% in November.

High inflation has meant average middle-income Indians are cutting back on non-essential expenditure to remain afloat.

“Over the last three years, the EMI on my home loan has gone up by 25%. My monthly fuel bills have doubled. So, to ensure that we don’t default on EMIs, we have cut expenses on eating out and vacations,” said Sudhir Verma, Delhi-based independent marketing consultant.

In all, about 39% homes in rural and 20.5% in urban India were buying at least one subsidised food grain. The per capita off-take of subsidised grain has doubled during the 2004-05 to 2009-10 period.

The Reseve Bank of India ‘s (RBI) continuous monetary tightening — raising interest rates to squeeze demand, and thus, prices —has failed to tame the price monster, but it has certainly forced families to cut down on non-essential expenses.

ABOUT THE AUTHOR
Chetan Chauhan
Chetan Chauhan is the National Affairs Editor looking into all aspects of news and features from across India. A Chevening scholar with over three decades of experience in reporting and news management, Chetan has extensively covered all important aspects of the social sector, political economy, environment and climate change nationally and internationally. He did a journalism course at the Reuters Institute of Journalism in Oxford and Digital Media training at Nanyang Technological University in Singapore. He started as a reporter with The Statesman in 1996 and joined the Hindustan Times in 2000 in the metro bureau covering environment, crime and Delhi politics. He covered hot local news, from the Jessica Lal murder case to the rebellion of Delhi Congress MLAs against then Chief Minister Sheila Dikshit, to the replacement of toxic vehicle fuel with cleaner compressed natural gas (CNG) in the national capital. Some of his stories on air pollution became part of the Supreme Court’s landmark MC Mehta versus Government of India case in the National Capital Region (NCR), forcing the government to take corrective measures. As part of the national political bureau since 2004, he covered important central sectors such as environment, education, social justice, labour, rural development, water resources, renewable energy, agriculture, broadcasting and the Planning Commission for more than a decade producing several exclusive and investigative breaking stories. His specialisation is the environment, having covered at least a dozen United Nations global conferences on climate change, biodiversity and wildlife including climate summits in Paris, Copenhagen and Bali. He also covered India’s two five-year plans ---11th and 12th and reported on drafting and execution of right based laws such as Right to Education, Right to Information and rural job guarantee law, MG-NREGA, now being introduced in new format as VG-RAM-G Act. He has in-depth knowledge of social sector issues. He was one of the first to report on tigers vanishing from Sariska and Panna wildlife reserves in 2004 and 2008, respectively, leading to the setting up of the National Tiger Conservation Authority (NTCA) and the introduction of stringent penal provisions for poaching. He has written extensively on the rising human-animal conflict in India and the degradation of India’s biodiversity hotspots because of mining and other activities. Since 2004, Chetan has covered Parliament comprehensively and participated in training on the nuanced coverage of Parliament proceedings. He has travelled extensively across India to cover national and provincial elections since 1998, especially in the Hindi heartland states, considered India’s road to power. He writes a regular column for Hindustan Times, Ecostani, on important national politics, economy, Himalayan ecology and environmental issues. His other responsibilities include providing inputs for edits and edit page articles for the publication, apart from managing news flow from across India.Read More

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