Lower and middle class households are increasingly feeling the pinch

House rent: Rs.1,500; Expenses on food: Rs.3,000; Transport: Rs.500; Others: Rs.1,000… the monthly expenditure incurred by S. Anandakrishnan leaves him with barely anything half way into the month. The 61-year-old, employed as a security staffer in a shopping mall, earns Rs.6,000 a month. The rise in prices of various commodities over the last few months has made life very difficult, he says.

“I used to cycle from Perambur to my workplace in Anna Salai so that I can save on the transportation costs. But recently, I had a flat tyre. Since I cannot afford to replace the tube, I come by bus these days,” Mr. Anandakrishnan says. Though it is just him and his wife at home, the increasing cost of living has forced the couple to find ways to minimise expenditure.

The Planning Commission, in an affidavit before the Supreme Court, has said that an individual income of just Rs.25 a day constitutes adequate “private expenditure on food, education and health.” However, in the current situation where the residents have little choice but to cut down on essentials in their battle against price rise, the Planning Commission's estimation seems way off the mark. Senior citizens, for instance, have a tough time, for they have to manage medical expenses, too. “I am living off my small savings and pension. Most of us senior citizens are on medication for one condition or the other. We cannot do without medicines, so we are careful while making other purchases,” says V. Venkatramanan, a retired banker. “Even if we opt for doctors whose consultation fees are relatively less, the cost of medicines is quite high,” he says.

Cost of living

Lower middle class and middle class households are increasingly feeling the pinch. Pointing to trends in prices of several essential commodities, residents say Chennai is gradually becoming a city with very high cost of living, bringing down the quality of life for many. School fees and other expenditure related to education account for a huge chunk of the expenditure of a middle class household. Saving becomes virtually impossible.

Karthika Ravi, who works with HDFC Bank, says her monthly grocery bill has more than doubled in the last two months, though she is purchasing exactly the same quantity she used to. “LPG prices have also gone up… it is nearly Rs.400 a cylinder now. Running even a small household is no easy task today,” she says.

The upward movement in the prices of certain commodities is testimony to this. A kg of tamarind, an essential item for most south Indian households, costs Rs.150. It was Rs.110 until a month ago. Red chillies cost Rs.190 now. “The price of Bengal Gram has risen from Rs.48 to Rs. 58 in the last ten days. Wholesalers tell us that a kg of rice may also cost a little more in sometime,” says M.Shanmugam of Padma Stores, Anna Nagar.

The price of Channa Dal has gone up from Rs.80 to Rs.105 per kg in the last few weeks. Garlic costs Rs.120 now, nearly Rs.40 more than its price a few months ago. The price of some vegetables, including carrots and onions are on the rise. Daily use items such as soap have also become costlier, he observes.

The price of meat has also gone up. According to Imtiaz Basha, who deals in wholesale and retail sales of meat, there is a 15 to 20 per cent rise in the cost of meat. “Mutton costs Rs.400 a kg and a kg of chicken, about Rs.130 to Rs.140. The increase in transport costs has impacted our pricing, too,” he says.

The steady rise in fuel prices has not only affected commodity pricing, but also the quality of life of the city's residents. Petrol prices, for example, have increased by nearly Rs.20/litre in just the last 10 months.

“The spending on transportation in the monthly budget has increased from about 10 per cent to 30 per cent within a year," says V.Subramani of the Traffic and Transportation Forum, a suburban residents' collective.

He says that suburban residents currently spend a minimum of 40 to 50 minutes and between Rs.80-150 every day just to reach the city's outer fringes. “Their journey to the workplace essentially begins only after that. The government must concentrate more on mini-bus and feeder services.”

National sample surveys show that expenditure on transport account for about 12 per cent of total household income on an average. However, this figure is the highest for the lowest income group.

“The poor are the hardest hit by a rise in transport cost,” says Brinda Vishwanathan of the Madras School of Economics. Due to the high property prices within the city, most middle and lower income groups have also been forced to build residences well outside the city. Their daily travel distances are among the highest. .

Mr. Subramani says that many have simply cut down on social obligations such as attending marriages and visiting relatives to save on travel expenditure. “If travel costs keep going up, people would have to find other non-essentials to cut down on.”

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Meera SrinivasanJune 28, 2012