Changing prices are stretching family budgets

Even the most blasé citizen has had to sit up and take notice of the price graph. From cereals and pulses to fruits and milk, chicken and meat, and processed foods, everything has become dearer. Needless to say, monthly budgets are strained as families grapple to stretch the budget without cutting down on the essentials.

People are putting in place coping mechanisms that range from change in consumption pattern to consciously cutting down protein-rich foods. The constant revision of prices is being attributed to a variety of factors along the production chain, including rising input costs for farmers, poor rainfall, lack of timely government intervention and hoarding.

Since February 2011, the price of milk — an important source of nutrition — has increased by no less than 42 per cent. Sugar is up by 13 per cent and wheat by 18. Eggs, which low-income families will tell you have become a luxury, have seen a 36 per cent price increase.

Pulses, which saw a huge price spike that later stabilised, recorded no less than a 60 per cent increase. However, the steepest rise has been in the price of two crucial staples, rice and ragi: a staggering 78 per cent and 100 per cent, respectively. Among other protein sources, mutton, fish and chicken went up by roughly 77 per cent, 100 per cent and 23 per cent.

Even fruits have become somewhat of a luxury. The prices of the popular yelakki banana and even the papaya shot up by 30 per cent during the period. The cheapest grape variety is up by 34 per cent and twice that much for the high-end variety. As for apples, they don’t tempt as much as they did with their three-figure tag.

Even consumers with expensive tastes — particularly those who buy organic — have had to swallow hard and fork out premium rates. Yes, everybody is feeling the pinch.

“You name the product, its price rise has been steep. Rent, LPG cylinder and petrol too have gone up,” said Kiran S., a mid-level executive in a private bank. “However, our salaries have not seen the kind of rise needed to meet these expenses,” he said. In the last two years, the budget of his family, consisting of his five year-old daughter and wife, has gone up by almost Rs. 3,000 a month.

So how is he coping? “We have cut back on eating out and weekend travel,” he said. So much so the family is now toying with the idea of ironing its own clothes. “We were paying Rs. 3 a garment: it is now Rs. 4,” he added.

Blaming government policy for this steep rise, Ramesh Chandra Lahoti, president of Bangalore Wholesale Grain Merchants Association, said: “We have no control over climatic conditions. But proper government intervention can help. Even when agriculture input declines, foodgrains continue to be exported, [pushing up] prices in domestic market due to scarcity.”

He attributed the high pulse prices to dependence on imports.

The steep increase in chicken price is being attributed to a sharp upward price movement of soya and maize. “The cost of soya went up by about 70 per cent and maize 50 per cent. However, despite the rising chicken prices, demand has not come down,” said K. Giridhar, business manager, National Egg Coordination Committee.

The worst hit are the low income families. For, unlike in the past, when they could substitute rice with other millets such as ragi, this time around this option too is a bit of a stretch: a kg of the humble ragi is now Rs. 40, compared to Rs. 20 in the past.

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