After high petrol and diesel prices, now fruits and vegetables are pinching the household budget -- so much that 36% people say that will have to axe their vacation plans and other discretionary spendings to pay for the necessities.
After high petrol and diesel prices, now fruits and vegetables are pinching the household budget — so much that 36% people say that will have to axe their vacation plans and other discretionary spendings to pay for the necessities. Despite continuous cuts in fuel prices for almost a week now, petrol and diesel prices continue to be as high as Rs 77.96 a litre and Rs 68.97 a litre respectively. On top of the shaken household budget, high fruit and vegetable prices are upsetting spending.
About 50% people are feeling the pinch of high fruits and vegetable prices on top of fuel prices and 36% have said that they will be axing discretionary spending like vacations, movies, shopping, eating out to fit their monthly essentials spending, a survey by LocalCircles showed. Due to high fuel prices, 17% said that they will switch to public or shared transport.
India is currently facing the snowball effect of oil prices that are pushing wholesale and inflation up. Fruits and vegetables are facing the twin effect of the rise in transportation cost and farmers’ agitation in several states. While fruits and vegetable prices were not affected in Uttar Pradesh, a sharp shot up of 25-30% was registered in Rajasthan, Punjab and Haryana as farmers dumped their produce on roads.
The protest had little impact on fruit prices, but it was the vegetable that was affected badly. Of the total 16,000 people surveyed, 43% said that they did not observe an increase in prices in last 15 days and a very few people felt the rise in dairy products prices such as milk and paneer.
The rising inflation is not only disrupting the maths of people but the Reserve Bank of India too. Following the hike in lending rates by top banks including SBI, PNB and ICICI Banks, experts expect a hawkish stance from the central bank. The RBI, which refrained from hiking rates in April, will brainstorm for three days as to whether hike the repo rates or not. At the 2nd Monetary Policy Meet of the central bank, vegetable prices are less likely to drive the decision as compared with oil and food prices.
The last meeting minutes showed that many MPC members including Deputy governor Viral Acharya. They clearly advocated looking for ‘signals‘ — hardening of food and fuel prices — over the ‘noise’ that is vegetable prices before taking a decision on repo rates.