Ghar Kharcha: Some Relief, Some Pain
What's happening to a household's budget? After having remained stretched for a while, prices of some goods and services are falling or rising at a slower pace, but other items continue to strain the wallet.
Take your daily cup of tea, for instance.
Sugar prices declined 0.9% in August on an annual basis, while milk prices saw a modest rise of 2.9%. But, tea leaves cost 17.2% more and the gas you used to make the tea — the LPG cylinder — costs 35.2% more, according to consumer price index inflation data for August 2021 from the Ministry of Statistics and Programme Implementation.
Retail inflation remained above the mid-point of the central bank's target of 4 (+/-2)% for the 23rd straight month but it has moderated to below 6%. In August, retail inflation was at 5.3% — a four-month low.
The aggregate inflation trends, however, may not capture how the day-to-expenses are changing.
Inflation On Your Thali
If you want to keep the cost of your daily meal under check, you might want to eat more veggies and less meat and fish.
While rice, wheat, and key vegetables, such as potatoes and tomatoes, have seen a fall in prices, eggs, meat, and fish remain more costly than a year ago. Even compared to the start of the year, these prices are higher now.
The price of onions was 24% higher in August compared to last year. But it has fallen 25% since the year's start. Similarly, while dal is still costing you about 9% more than last year, since January, prices have only risen about 2.5%.
Inflation in oils and fats, especially in refined oil and vanaspati, is still high and rising. Compared to a year ago, your cooking oil is costing you 33% more.
The government has reduced the import duty on edible oils twice this year to give consumers relief. This is, however, still to have impact. Even on the index basis, oils and fat increased 0.9% month-on-month, after a decline of 0.9% in July. This suggests limited impact of the cut in the import duty on edible oils so far, a research note by Yes Bank said.
Bills, Bills, Bills!
Food is not the only essential you and I spend on. There is rent, electricity and transport. Among these categories, the rise in home rent and electricity charges remains modest. However, the rise in prices of petrol and diesel for vehicles and LPG for cooking continues to burn a hole in pockets. In August, petrol prices for vehicles rose 24%, while diesel prices for vehicles rose 22%. Since the start of the year, petrol and LPG were both more expensive by over 18%. Still, the rise in price was lower from the previous month. LPG prices are 35% higher than a year ago, according to government data. Prices of motor fuels moderated, but cost of LPG cooking gas continues to rise, Rahul Bajoria, chief India economist at Barclays, said. The slight ease in the international price of crude oil in recent days also will help in easing fuel inflation, Govinda Rao, chief economic adviser at Brickwork Ratings, said.
Festive Shopping Coming Up?
With the onset of the festive season, are you planning to buy a new TV or fridge? Or maybe even a scooter or car?
Compared to last year, prices of TVs and two-wheelers have seen double-digit inflation. While a new TV can cost 11% more than August last year, a scooter or a motorcycle costs 10.5% more, as per official data.
Since the start of the year, while price rise in cars, laptops and mobiles remain modest, the cost of a new TV or a scooter has risen. The cost of a TV has risen by about 9% from the start of the year, a scooter costs about 6% more. Recently, car manufacturers have also increased prices but these are yet to reflect in the index at the aggregate level.