The government in a surprising decision has raised diesel prices by five rupees and restricted number of subsidized cooking gas cylinders to six in a year. The decision has been described as shocking and surprising because the government itself had been admitting that inflation, especially food inflation was not at a comfortable level, and its main primary focus was to arrest the inflationary pressure rather than growth.
HOWEVER, TAKING a sudden u-turn the UPA government has hiked diesel prices, which is set to push the food inflation upwards as input cost to process raw products and transportation will rise. Whether it is grocery items such as sugar, rice, dal, flours or the vegetables; inflationary pressure is set to disrupt the entire budget of the kitchen.
One has to shell out more for not only running the kitchen but also to reach offices while using personal four-wheeler or public transportation.
Nishant Sharan, who resides in West Delhi and works in Gurgaon, travels mostly by taking lift in call center cabs, which were normally charging 20 rupees upto IFFCO chouk. But today he took the services of over-crowded Delhi Transport Corporation' (DTC) bus.
“I normally travel by call center cabs by paying 20 rupees. Cabs are comfortable and fast. But today as soon as I approached a cab, the driver said the fair will be 30 rupees. I dropped the cab service and took the DTC bus, which was carrying passengers beyond its capacity. It is all because of rise in diesel prices,” said Nishant, a daily commuter, told this citizen journalist
The rise in diesel prices will also impact farmers who use subsidized diesel to run water pumps for irrigation. Not all the farmers have their own tractors in this country. They pay fee to others to get their land plowed. This fee which is charged on the basis on per hectare will also increase now.
“Farming has not remained profitable venture anymore. Input costs were already up and with this latest hike in diesel, it will become more difficult even to grow anything for own use,” Kripa Shankar, a small farmer from Eastern UP, told this citizen journalist.
According to latest figures released by the government the wholesale price based inflation during the month of August has jumped all expectations to reach 7.55% against 6.87% in July. Food inflation stood at uncomfortable level of 9.1%.
The impact of latest hike in diesel prices will be visible in September month's data to be released next month. With the current trend, headline inflation is set to jump more with food inflation looking set to touch double-digit.