Shopping cost skyrockets in India

Indian shoppers are facing the prospect of paying through their noses for their purchases.

Be it cars,tyres and CNG or consumer durables like refrigerators,washing machines or microwave ovens,manufacturers across different sectors have raised prices in the last 10 days,citing increase in raw material costs.

The hike in prices of these items has come about over and above milk,onion,garlic,and other vegetables which have become expensive in the past few weeks. Food inflation has crossed 14 per cent.

Though the government is hopeful of inflation coming down to six per cent by March,the latest price revision of the manufactured goods will exert more pressure on the overall inflation which was 7.48 per cent for November,analysts say.

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In the wake of rising prices of steel and other raw materials,several consumer durable manufacturers like LG and Whirlpool have jacked up prices upto four per cent.

“Commodity prices are going up…this is a cause of concern on overall prices of the products,” Whirlpool India Vice President (Corporate Affairs and Strategy) Shantanu Dasgupta had said.

For motorists driving CNG vehicles in the national capital,the new year began with increase in their fuel bill. The Indraprastha Gas Limited has increased the CNG prices from Rs 27.75 to Rs 29 per kg.

Cars too became costlier. While Tata Motors hiked prices upto Rs 30,000,other auto firms like Mahindra & Mahindra,Hyundai and General Motors have announced their intentions to follow suit.

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Some of the leading tyre-makers have also raised the price.

As regards food,onion prices after declining,have returned to Rs 45-60 per kg in different metro cities. Milk producers like Amul and Mother Dairy have raised the retail price by upto Rs 2 per litre.

Given the increase in prices of both edible and non-edible products,containing overall inflation,measured by the wholesale price index (WPI) remains a big challenge for the government and the Reserve Bank.

“Any complacency on the inflation front is unjustified because the food inflation may remain sticky. With higher government spending in the last quarter,demand may further go up and prevent the prices to come down,” said Ficci Director General Rajiv Kumar.

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The central government expenditure rose by 15 per cent during the first three quarters to Rs 6.90 lakh crore from Rs 6.21 lakh crore in the year-ago period.

The government expenditure for fiscal 2010-11 has been budgeted at around Rs 11 lakh crore. The expenditure in the last quarter of this fiscal may cross Rs four lakh crore at a time when there is a cash crunch in the economy.

Increasing prices of raw materials like coal and iron used in steel making has forced several companies to raise the product prices.

Companies like SAIL and JSW Steel have hiked their prices.

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“We have increased prices across all product categories by 3 per cent on high input costs,” a senior company official of SAIL had said.

Cement prices in various metros too have inched up.

According an industry expert,cement prices in Mumbai and Maharashtra have increased by an average of Rs 10 per bag. The hike in cement and steel prices would also push the real estate prices.