New Delhi: Households wrestle with the increase in living costs at work and income has been hit in the middle of the Covid-19 pandemic, but economists do not expect the government’s annual budget because it will provide a lot of assistance.
Tea, edible oil, pulses, meat, gas and cooking services have risen 20% -40% since the pandemic starts at the beginning of 2020 – wounding consumers while their income falls below the level seen before the crisis.
The retail price has risen almost 10% in the past two years compared to 8% in five and a half years earlier after Prime Minister Narendra Modi in 2014, analysis of inflation data prepared by the Ministry of Statistics showed.
The government plans to increase import taxes for more goods to support local manufacturing and increase expenditure for long-term projects.
Economists blame higher taxes, widening fiscal deficits, easy Monetary Policy (RBI) Bank of India (RBI) and inventory during pandemics for sharp price increases.
The government has offered a little help to households except free food granules for poor people.
According to official estimates, the average per capita income was at Rs 93,973 ($ 1,258) for the fiscal year ending March, lower than Rs 94.566 before the pandemic.
The unemployment rate was at 7.9% in December, with almost 35 million people looking for work, a report by the Mumbai-based tank tank center to monitor the Indian economy (CMIE).
Meanwhile, the economy is projected to grow 9.2% at 2021/22 after a contraction of 7.3% the previous year.
Imported tariffs in hundreds of goods in the past two years, climbing global crude oil and commodity prices have added to the burden of the household.
The gas cooking price rose 43.36% in the two years which ended in December 202, compared with a 30.68% increase in five and a half years before, data showed.
However, the cost of electricity and domestic education rises at a slower speed that reflects the decline in economic activity and closure of educational institutions during the pandemic.
Inflation is expected to push even higher because producers continue the increase in input costs while the central bank delays monetary tightening in an effort to support economic recovery.
Retail inflation was accelerated to five-month highs 5.59% in December from the previous year, while wholesale price-based inflation, proxy for producer prices, slightly fell to 13.56%, but remained in two consecutive months.
“The Covid period has been a nightmare for Indian workers,” said K R Shyam Sundar, a worker economist in XLRI, Jamshedpur, and the author of “the impact of Covid-19, Reforms and Governance on Labor Rights”.
He added that households suffered work losses, falling in income and a sharp increase in prices during a pandemic.
“RBI and the government, which excessively focuses on the supporting industry and increases growth, now must take steps to control inflation and provide assistance to households.”