No respite for consumers from soaring food prices

 Consumers are unlikely get any respite from soaring food prices, with diesel price hike and imposition of around four per cent service tax on railway freight transportation adding to their plight. 

The price of sugar, rice, pulses, flour, egg, meat, fish and milk have surged by two to five per cent in the past one month and are expected to zoom further due to the cumulative effect of diesel price hike, service tax in Railways, decision to extend sugar exports and increase in urea price.

The government hiked price of diesel by over Rs 5 on September 13, following which inflation in diesel shot up to 8.94 per cent. It also reflected on transportation cost of fruits, vegetables and other commodities.

Last month, the Centre imposed a 3.7 per cent service tax on railway freight transportation. The move, which was effected from the beginning of October, has also impacted the food commodity bill, analysts said, although there is no official data available on the extent of impact in the past fortnight.

Monday’s decision of the Centre to continue with unrestricted export of sugar in the present season, beginning in October, is expected to add fuel to the fire. Sugar prices have already hit the roof in domestic market and allowing export during the festive season when the demand peaks, is expected to make it costlier.

Analysts said: “Some key government decisions in the past few weeks are expected to  keep an upward pressure on inflation in the next couple of months and beyond.”