Over 88% of middle income group (MIG) and lower income group (LIG) find difficult to manage the household budget and squeezing families' finances to the lowest level due to uncertainty of rains, according to a country-wide survey conducted by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) under the aegis of ASSOCHAM Social Development Foundation (ASDF).
“The fear of bad monsoon has suddenly hiked the vegetables and fruits prices by 300% from the farm to your dining table,” said the ASSOCHAM survey on “Rising prices widen gap between the rich and the poor” in which over 5,000 employees took part.
The survey was conducted in a period of two months beginning June and July 2012 in major places like Delhi-NCR, Mumbai, Kolkata, Chennai, Ahmedabad, Hyderabad, Pune, Chandigarh, Dehradun, Bengaluru and so on. Delhi-NCR Ranks first followed by Mumbai (2nd), Bangalore (3rd), Ahmedabad (4th) and Kolkata (5th). About 500 employees from the different sectors were covered by the survey from each city on an average.
Releasing findings of the survey, secretary-general D S Rawat said, “In an average salary structure of middle-income group - Rs 35,000 per month, the amount available for discretionary spending is not more than Rs 15,000 as an average employee shells out over Rs 6,000-8,000 on housing loan or rent, Rs 5,000 on cars/ two wheelers, Rs 7,000-10,000 on education cost and FMCG. The share of Insurance premia including health insurance is over Rs 3,000-5,000 each month as employees need to insure themselves and their families as social security net.”
Over 89% of the respondents said that the price of every commodity had gone up. There was no control over vegetables prices and milk rate had doubled in the last five years.
The upward spiralling inflation has pinched all the middle-class families across the country. However, 73% of the respondents said that their take-home currently is not more than 30% of their total package and leftover amount of 15,000 is spent for food, commuting costs, utilities, doctor and education bills, according to the survey.
So, despite a record food production of 252 million tonne this year, prices stay high and food inflation is still around 10.5%, more or less where it was a year ago. It also mentioned that the food prices for rural population rose 9.87% and for urban population - 10.18%. For vegetables the price rise was 24.55%, weightage of 5.44% in CPI. In the case of milk where India is a net exporter, prices rose 14.9%. Prices of eggs, meat and fish rose up to 9.95%.
Rawat added that among the food products that saw sharp rise was edible oil. The impact on edible oil is largely on account of the depreciation in the exchange rate, since India is a net importer of the commodity. The rupee has fallen by 8.5% this fiscal year, 2012-13, so far translating into higher import costs of edible oil. Edible oil prices rose 17.64% in April this year. Prices of others like sesame, groundnut and sunflower oil are rising so fast they will soon go out of reach of the middle-class.
