What A Stroll Down Delhi’s Chandni Chowk Tells You About The Indian Economy

Business has been hard but it's becoming harder still.

Over the last year, marble prices have risen by over 25%, Yahya said. In a career that spans over 40 years, there are few other times that he can recollect saw such a sharp rise in costs. "We have to buy at these prices," he says, adding that it has forced him to increase his charges by as much. "Ab kya karen (what do we do now?)," he says in Hindi.

Yahya works out of a shop in Lal Kuan, Chandni Chowk, a market that some say dates back to the 17th century. It has attracted merchants from across the world selling everything from exotic birds to ornaments. In current times, it draws shoppers in search of bargains.

Yahya just has to walk down the street to find many who will share his lament about rising prices. From food stalls to clothing stores, prices of inputs are rising across categories. Some are able to pass it on, others, worried about still fragile demand, are taking a hit by compromising on margins.

In that sense, Chandni Chowk is a microcosm of an economy where inflation has hit even though demand hasn't recovered. Wholesale inflation has risen to 12.5% but retail inflation is at 4.5%. While growth in the economy has rebounded, demand is fractured and fragile.

The shopkeepers may not know the data, but they are living it.

Vijender, who has helped run Pt. Gaya Prasad Shiv Charan Parathe Wale in the famous Paranthe Wali Galli for near two decades, says prices of every ingredient have risen in recent months. There is no item that hasn't turned costlier, he said.

Potato prices, inflation data tells us, have risen 9% over the month of October, after easing earlier in the year. Tomato and onion prices have seen an even sharper surge of 54% and 27%, respectively.

Have they raised prices?

"How can we?" he asks. "Even now, there aren't as many customers as before the pandemic. Prices will be raised when customers slowly return to the galli," says Vijender, adding that if they raise prices now, they may turn away customers.

As a result, instead of the Rs 5 per parantha they earned earlier, they now earn Rs 2, he says. "Apni kamai aur kam ho jayegi. Aur kya."

Uncertainty remains. Just as demand is picking up, there is talk of a fresh lockdown, Vijender says. The Delhi government was forced to contemplate restrictions to curb the region's air pollution but has not imposed them so far.

Some may have chosen to reduce the size of the parantha, a phenomenon known as shrinkflation in economic parlance where prices are kept unchanged but quantity is reduced.

A customer passing by is heard complaining that the paranthas now appear smaller in size. "Now, even after eating two paranthas, I still feel hungry."

A few lanes away, Rajesh Kumar sells Daulat Ki Chaat, an old Delhi specialty made from milk, cream and sugar. While prices of milk have seen a slight rise, cream now costs 400 a kilogram from 350 per kg earlier.

A passing customer asks Kumar how much for a plate of this winter dessert. It'll be Rs 50, Kumar replies. "Itne se ka pachaas rupya," the customer exclaims, questioning the price of a small portion.

It's not just raw materials that have turned costlier. Utilities, the price of cooking gas in particular, has soared. It is running 43% higher than a year ago, according to the official inflation data.

Prices of cooking oils, gas and diesel have all seen a big rise, the proprietor at a sweet shop, Shri Bhujia Bhandar, says. They have had to increase prices by about Rs 10-20 per kg across categories of sweets. They started charging more for some items at once when prices of cooking oil rose, he says. His famous Matar Kachori or pea patties cost Rs 300 per kg this season compared with Rs 280 last year.

The shop, however, has managed to hold on to its customers because everyone has raised prices.

The Old Famous Jalebi Wala, with a loyal customer base, is also preparing to charge more.

Famous for colossal ghee jalebis, the shop has seen inflation push up costs by Rs 100 per kg. These jalebis currently retail at about Rs 500 per kg but prices are expected to be revised soon, the staff at the store told BloombergQuint.

Clothes stores have their own concerns.

Bridal stores are preparing to replicate "Katrina Kaif wala lehenga". In the midst of the wedding season, some have orders till March next year. Demand is looking good.

But fabric costs more and the availability of kaarigars or artisans who make these items is low. Many returned to villages during the pandemic.

In just a matter of a month or two, the price of raw silk rose from Rs 800- 900 a metre to about Rs 1,100-1,200 now, according to Palki Studio staff. "Aajkal kapde ke thaan hi nahi aa rahe hai," one says, shaking his head, complaining about supply constraints hitting the availability of cloth.

Eager to capture demand, the shop has not raised prices.

Storeowners in Kinari Bazaar, where you go to buy beads, laces and other accoutrements, face the same problem though they don't know why prices are rising. "Upar se isi daam per mil raha hai ab," one says, explaining that wholesalers have raised prices.

Inflation in clothing and footwear category, incidentally, is at its highest in over seven years at 7.5%, official data shows.

The message of rising input prices, was perhaps best summed up by the owner of a store selling the "first copy" of designer Rahul Mishra's designs for Rs 50,000.

"Sab mehenga ho gaya hai, sasta to sirf insaan hai," he says philosophically. His lament that everything is more expensive, only the of life has fallen, comes as the nation and the economy struggle their way out a devastating pandemic.