Here Is Your 5-Point Guide On How This Impacts your Monthly Budget
Food inflation has shot up and is pushing the limits, with you and I bearing its brunt. Everything is much more expensive than it was a month ago. Edible oil has touched record high prices, pushing household budgets up significantly. Wheat and Atta prices have jumped by 25 per cent to Rs 35 a kilogram (KG), while slightly better-quality basmati rice has touched Rs 100 per KG, up 40 per cent. Even prices of soap and instant noodles have risen sharply.
Fuel Prices Will Rise Further: Petrol and diesel prices will likely rise further as state retailers set fuel rates based on crude prices in the international market, expected demand and anticipation of price moves. Crude prices have surged and have remained largely above $100 per barrel since the Ukraine war started in late February. With India importing 85 per cent of its oil needs, the signs are ominous for fuel prices.
Transportation Will Get More Expensive: Travel expenses will increase as transport companies pass on the rise in fuel rates to consumers. From private transport to app-operated cabs to autorickshaws will cost more. The rise in transportation costs will feed into the prices of fruits and vegetables finally sold to end consumers. Other food items' prices will also rise and weigh your monthly budget.
According to a Reuters survey of economists, India's retail inflation likely surged to an 18-month high in April, largely driven by rising fuel and food prices. Food inflation, which accounts for nearly half the consumer price index (CPI) basket, reached a multi-month high in March and is expected to remain high due to higher vegetable and cooking oil prices globally.
EMIs On Loans Will Rise: The Reserve Bank of India, in an emergency meeting last week, raised its key interest rates to combat runaway inflation. That has pushed several state-run and private banks to hike the interest charge on loans. With the RBI expected to increase rates faster, your Equated Monthly Instalments (EMIs) on home, auto, and personal loans will likely go up further.