Hike in moving costs to push up inflation in JK

BILAL HUSSAIN
Srinagar: Finally, the heat of the spiraling oil prices that have set global markets on fire was felt by the common commuter in the Valley, with new fare structure coming into effect from Wednesday.
Following the three day wheel-jam in J&K, government had acceded to the demand of the transporters and announced 14 per cent hike in the passenger fares last month. However, the official notification of the new fare structure was issued on Tuesday and the new fare rates were implemented from Wednesday.
Besides the burden on the common consumer in terms of extra fare, experts here believe, the increase in the transportation cost would have direct impact on the state inflation. "The inter-district movement of the essential commodities would become costlier which in turn would increase the price of several commodities," local economists said.
Head, Economics Department, Kashmir University, Prof G M Bhat said the increase in the passenger fare and freight would lead to general price hike. "The hike in transportation is a double edged sword and has two way effect; one, the commuters have to shell out more on bus fare, two there will be general price increase," he said.
The cost of movement is the significant parameter while determining the cost of life in any place, he added.
Market analysts here believe the increase in the moving cost has completely been shifted to the commoners. "The hike in the oil prices has put pressure on the transporters and to compensate them government increased the cost of transportation. The final burden would be borne by the common man," said Nazir Ahmad, a government employee.
The increase in fare would force most of the people to redraft their daily and monthly budgets to accommodate the hike. "I used to keep a specific amount for the movement cost on monthly basis. Now I have to adjust the hike in coming days," said Owais Nazir, a resident of Budgam.
The J&K government vide SRO-210 provided levying of 14 per cent surcharge in respect of big and medium passenger services, 11 per cent surcharge in respect of Tata sumo and similar other vehicles and 10 per cent surcharge in respect of auto rickshaws on the existing notified passenger fare.
"To give some relief to the common man, the state government should have lowered the rate of taxes on petroleum products instead of increasing the fares," said, Irshad Ahmad Wani, a banker.
Meanwhile, the transporters have expressed satisfaction with the implementation of the fare hike. "The hike was long time due as it has given us some respite," said a min-bus driver.

Price rise sets markets on fire, commoners feel the heat

Price rise sets markets on fire, commoners feel the heat

BILAL HUSSAIN

Srinagar, July 12: The spiraling price rise of essential commodities and food items has set the markets on fire with commoners facing the major brunt. The hike is affecting the budget of common consumers forcing them to cut on other expenses to meet the increasing prices of the essential commodities.
Market observers say the hike is affecting consumers more than the traders. "The hike in prices of commodities directly affects the commoners. The hike is not affecting the producers or the manufacturers as they pass the burden on the end users. The big companies mange their profits through increase in prices and extract more from the consumers," he said.
Experts cited the major reason for higher inflation as non-availability of the railhead in Kashmir. "The consumption goods come to the Valley through trucks which adds to the cost of the goods," they said.
Another reason, experts believe, for higher inflation in the Valley is that Kashmir being the hilly remote area, cost of living is higher, as majority of the items are imported from outside.
Experts say the recent inflation rate at 11.98 per cent does not give the correct picture of the hike in the individual items. "The 11.98 per cent represents the hike in wholesale price index. The price hike is being felt more at the retail level," they said.
Koul said soaps weighing 100 grams, which were sold at Rs 16/each three months earlier, are now being sold at Rs 17/each in new packing weighting 20 grams less than the earlier.
The 100 gram tea packing was sold at Rs 16 earlier and the same is sold now at Rs 18. The brand of Numkeen tea that was priced at Rs 135/kg is now being sold at Rs 170, representing an increase of 27 per cent.
Take the case of P-Mark oil brand. The 15 litter tin is sold at Rs 1325 at present. The rice, IR8 quality widely consumed in the Valley used to cost Rs 1100 one quintal and the same is now being sold at Rs 1600.
The basmati of 1 kg used to cost Rs 40 and the same costs now Rs 80 kg, which is an increase of 100 per cent.
The inelastic product in terms of prices, salt too has got affected, which used to cost Rs 7.5 for 1 kg costs now Rs 9. In case of dals of 1 kg, which used to be sold for Rs 40, now are sold at Rs 80.
Inflation soared to a fresh high of 11.89 per cent on rising prices for the week ended June 28 2008, on the back of surging food and commodity prices.
Inflation trend continues to remain higher and is expected to touch 11.9 per cent next week ended July 4, 2008.
Experts are of the opinion that double digit inflation is here to stay for some more time.
It is estimated that steel and its products used in industries like auto, housing, white goods, capital goods contribute almost 21 per cent to inflation.