VAT hike makes Deepavali less sweet - The New Indian Express

VAT hike makes Deepavali less sweet

Published: 11th November 2012 09:13 AM

Last Updated: 11th November 2012 09:13 AM

This  Deepawali  has become an expensive affair for people with the cost of sweets and  savouries, garments  and crackers escalating, following the hike in VAT .

The prices of sweets and savouries have gone up by 8 per cent following the increase in VAT from 2 per cent to 10 per cent, readymade garments by one percent (VAT increased from 4 per cent to 5 per cent), crackers by two per cent (VAT increased from 12.5 per cent to 14.5 per cent).

Besides this, the prices of grocery items including sugar, oil, maida, cashew nut, gram flour, LPG   have also increased post the VAT hike, leading to soaring production costs. As a result people are feeling the pinch.

For every single sweet and snacks the price has gone up by 60 to 70 per cent, according to the masses. “ We purchased ladoos, balushai and Mysorepak for Rs 1.25 lakh last Deepawali, but purchasing the same item and quantity this year cost us Rs 2.5 lakh,” says a political leader who has made the bulk purchase for distribution among his supporters and well wishers. Even the prices of crackers have risen pretty much, along with production cost and VAT. “Last Deepawali we purchased 1500 gift boxes of crackers for Rs 3.25 lakh, but this time the same quantity is more than Rs 4 lakh,” said another person. The situation in garments and clothing is no better. In the mid category range of sarees and salwars price hike is around 30 per cent, said  Ramesh, employed with a private company, after purchasing a saree for his wife and a salwar suit for his daughter.

Though the government’s opening up of PAOSCO Deepawali Bazaar with groceries and crackers at rates lower than market price has eased the situation a little,the non-release of  Deepawali bonus is posing difficulties for the employees to make the purchases. With only  four days to go for Deepawali, these employees are unable to shop  for their families, as they are still awaiting the bonus.  Purchasing consumables has also taken a backseat for many families. After  having to shell out more for  garments, sweets, crackers and groceries, people are not exploring the option for purchasing consumables.

 Moreover the prices of consumables have also increased after VAT hike and shops are not giving incentives or gifts as their margin of profit has already narrowed down. Adding to the hiked commodities list prices of TV, refrigerator and washing machines have increased by 2 per cent,and two-wheeler by 6 per cent.

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