The consumer price inflation in July 2023 was alarming, led by the rising food prices. In fact, the food inflation stood at a 39-month high of 10.57 per cent. But how badly did this affect the common households in India?
businessline did an analysis of the extent of increase in the monthly bill for essential food items between July 2022 and July 2023 in metro as well as non-metro cities. This analysis is based on our assumption of the consumption of each food item by a family of two adults and two children. The prices were sourced from the Department of Consumer Affairs.
The analysis reveals that food inflation was much higher in metros compared with non-metro cities. The national average for increase in food inflation over the past year was 12.45 per cent. But food inflation in Delhi and Chennai was around 18 per cent, while it was much higher at 21 per cent in Mumbai. But food inflation was below national average in smaller cities such as Tirupati and Patna.
“Grocery bills get affected by spikes in the prices of products which have supply issues. It gets magnified in metros as logistics costs tend to be higher. Also, margins are higher due to the higher living costs of sellers who pass on part of the cost to consumers,” says Madan Sabnavis, Chief Economist, Bank of Baroda.
The tomato reign
Though the inflation rates are different, people’s woes appear similar across cities. Rahul Kumar, a social activist from Patna, noticed a difference of ₹2,500 in his family’s bill of food items, between July 2022 and 2023. His is a family of five adults and a child. “We’ve been trying to avoid tomatoes as much as we can,” he says. In Chennai, Ranjani, an engineer, says that she has been altering her food habits, keeping the price of tomatoes in mind. “We started eating more coconut chutney at home and tomato chutney is now a rarity,” she says.
The country has been grappling with the high price of tomatoes for a while now. In July, tomatoes could have been the second-most expensive food item that an average Indian household paid for. While the average price of a kg of tomato was ₹36.5 in July 2022, in July 2023 it was ₹127.12. This is a 248 per cent increase.
In fact, rice and wheat were only the third- and fourth-most expensive food items in July 2023. At the same time, the prices of all major cooking oils fell in a year. This ensured that the monthly household budgets did not go over the roof. At an all-India average, the price of a litre of sunflower oil dropped from ₹184 per litre to ₹148 per litre.