As Karnataka exits pandemic, price rise delivers sucker punch

Ranganath, a marginal farmer, grows paddy twice a year on his 30 guntas of land in Arahatholalu village of Bhadravathi taluk in Shivamogga district.

Published: 10th April 2022 06:42 AM  |   Last Updated: 10th April 2022 06:42 AM   |  A+A-

Aam Aadmi Party Women’s Wing cook food on wood fire to protest against rising prices of cooking gas and fuel at Freedom Park on Saturday. Around 250 AAP leaders and volunteers joined the agitation aro

Express News Service

While issues like hijab, halal meat and use of loudspeakers for azaan continue to divide society on communal lines, increasing prices and inflation is impacting people, regardless of their religious background, across the state.

Price rise has come at a time when Karnataka is just emerging from a pandemic, and the state’s unemployment rate is about 1.44 per cent, as per data from the Centre for Monitoring Indian Economy (CMIE ). The rate of unemployment is the percentage of unemployed individuals in an economy among individuals currently in the labour force. But besides the unemployed, there is also a yet-tobe- estimated number of underemployed people, who although employed, are in jobs that undervalue their qualifications and skill sets. The latter segment suffers equally due to price hike because they are drawing much lower salaries than what they are actually qualified to draw — and price hike and inflation take a big bite off their relatively paltry incomes.

For instance, Karthik Raj, an engineering graduate who is forced to work as an an auto driver in Bengaluru, says, “It’s very difficult because the price of almost everything has increased. Daily expenditure is now twice compared to, say, before the pandemic. The recent hike in auto fares is barely 10 per cent. Meanwhile, LPG fuel has risen from around Rs 45 per litre two years ago to Rs 74 per litre today. As the sole breadwinner of my family, the increase in household items like food and groceries, children’s school fees and failure to increase fares has made matters very difficult. We also have to compete with Ola and Uber to make a living.”

However, it’s not easy going for Ola and Uber drivers either. Tanveer Ahmed, president, Ola Uber Drivers and Owners’ Association, says before Covid-19, fuel cost Rs 65/litre and cab fares were almost the same. At present, the cost of diesel is almost Rs 100/litre.

“During the lockdown, we had to pay EMIs despite most of us being at home without work. Many have taken loans on interest during the lockdown, as ours is a daily earning industry. The entire family depends on one vehicle, which is bought on loan. Additionally, we need to pay taxes and insurance,” he says.

He says continuous fuel hikes have hit their lives. “Daily earnings are spent on fuel and nothing is taken home,” he says. “We requested the state government to give us subsidies by issuing passes for commercial vehicles, but nothing has been done. If we increase fares, business will be hit as the public would be burdened. Moreover, GST (Goods & Services Tax) is being levied on cab aggregators.”

A FARMER’S WOE

Ranganath, a marginal farmer, grows paddy twice a year on his 30 guntas of land in Arahatholalu village of Bhadravathi taluk in Shivamogga district. He belongs to a lower middle class family. His annual income is approximately Rs 2 lakh. He says, “I am forced to work as an agricultural labourer to manage household expenses. The number of days of working as a labourer has increased, with soaring prices of essential commodities and fuel.”

His monthly family expenses would come to Rs 15,000, but how cross Rs 20,000. “For two or three months, we are being forced to pay an additional Rs 1,000 per tin of cooking oil. The cost of petrol has gone up three times. It is unfortunate that vegetables grown by farmers are purchased at a lower price and sold at a higher price. Even we have to purchase them at a higher price from vendors. The cost of agricultural labour has increased from Rs 400-500 to Rs 800-1,000, and scarcity of labour persists. We have to meet labour costs during planting of saplings and harvesting,” he explains, expressing anguish over the hike in power tariff too.

TEACHER BOWS TO HIKE

Ambika Savalagi, although an MA, BEd graduate, teaches in a private school, Birla Shloka School in Kalaburagi, for a salary of Rs 10,200. Her husband, Santosh, works with a private company and earns Rs 10,000. Their son is in Class 10.

“I am afraid of facing the future with the income my husband and I earn, as it is barely sufficient to lead a life, let alone think of luxuries,” she laments. “I manage to run the family with Rs 18,000-19,000 per month. We have to spend our entire income on the house.”

Rachana, a BSc student at a private college who stays in a paying guest accommodation near Kadiyali, Udupi, says even the price of snacks has increased after commercial LPG price was escalated by Rs 250 per cylinder.

“I came here from Davanagere to study, but due to the rise in cost of living, I worry about my parents as I am forced to ask for more money to meet expenses. My father is a farmer and ours is a middle-class family. This price rise issue has to be tackled by the government, otherwise people like us will suffer,” she says.

“My father is planning to send my sister to Udupi after two years for her education. But then it may be even tougher to manage a family budget, since my mother is unwell. The government should at least make basic cooking items affordable,” she says.

Sushmitha, a nursing student staying in a paying guest accommodation, says her parents are forced to cut down on expenses. Her mother is a midday meal worker and father a beedi roller.

“My family’s monthly income is Rs 20,000. Other than things required for my studies, I have stopped spending for personal items, so that I don’t burden my parents,” she says. Alayna, a degree student, says PG owners are also cutting down on expenses and providing non-vegetarian meals only once a week.

“The PG owner has increased rent from Rs 5,000 to Rs 6,500, which is not affordable for many, and says we have to pay extra for non-vegetarian food. Since electricity bills have also gone up, they are planning to accommodate more students in each room,” she says.

BIG BITE OFF SMALL SNACKS

Small eateries and hotel owners, colloquially called ‘mirchi bajji centre owners’ are hit by rising prices of LPG, petrol and edible oil. Small hotels which make vadas, onion pakodas, mirchi and brinjal bhajjis cannot sell vadas or bajjis below Rs 10, and if they increase prices, they fear losing customers. Hotel owners say they may have to shut down hotels, or suffer losses. Petrol price has crossed Rs 100, edible oil is over Rs 200, a domestic LPG cylinder costs Rs 971 (14.2 kg) while a commercial cylinder costs Rs 2,315. Hoteliers say their profit margins are narrowing, and standard or big hotels are also under loss.

Sukumar Shetty, a hotel owner in Gadag, said, “We saw a sudden hike in LPG, fuel, essential items and power tariff. It is a shock for those who run small hotels. We usually invest Rs 1,500 daily on raw materials for bajjis and other snacks, but now it’s beyond Rs 2,000 and we have thinner margins.” Motilal Thakur, a hotel owner from Panchakshari Nagar, says, “Prices are increasing but we cannot increase rates because customers will not come. Some hoteliers are making smaller vadas and idlis and giving less quantity of upma and other items to cover losses.”

A SOLUTION?

A barrel of crude, which was $79, had touched $139 but over the last three days, has dipped to $100. If the Central government decreases excise tax and the State government reduces tax, the price of fuel will be reduced further. Whenever inflation goes beyond the threshold limit, the government and private sector can introduce subsidised coupon systems, through which people can buy essentials. Some countries have similar systems. If people are given these subsidized coupons, their purchasing power will increase, which will ultimately go to the government in terms of tax. This system can be practised during times of inflation.

— Prof SR Keshava, Professor, Department Of Economics, Bangalore University Inputs from: Ashwini M Sripad, Praveen Kumar, Donna Eva/Bengaluru; Arpitha I/Shivamogga; Ramkrishna Badseshi/ Kalaburagi; Prakash Samaga/ Udupi; Raghottam Koppar/Gadag; and Divya Cutinho/Mangaluru



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