Inflation may have dropped significantly from last year, but most Indians still find prices of goods and services consumed on a daily basis growing beyond their comfort level, an Assocham study said.
Despite fuel prices coming down and moderate rise in wages, cost of education and health services — two critical areas of interest to the middle-class — has risen much higher than the headline Consumer Price Index (CPI) for September at 4.41 per cent, the industry body said.
Retail inflation in pulses and products category has risen after prices of lentils reached as high as Rs 210/kg, while that of spices have witnessed rose 9.2 per cent, it said.
“With severe shortages of education and health facilities in the public sector, the middle-class has to depend on private sector schools, colleges and hospitals and their costs have become quite high.
“While the annual increase in prices of these services may not show huge rise, the base price of such facilities is so high that it is becoming increasingly difficult for a large number of people in cities and small towns to afford them,” Assocham Secretary General D S Rawat said.
Rawat suggested that public expenditure on health and education be raised significantly, both at the Central and state government levels.
The chamber’s study showed that other items of use for the middle-class, like meat, fish, milk and milk products, have also seen significant price increase between 5 and 5.5 per cent.
“While the RBI has in the last instance reduced the policy rate by 50 basis points, the average transmission is not above 30 bps despite so much of prodding by the government and the Reserve Bank of India (RBI),” Assocham said.