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LATEST NEWS UPDATES | Bengal among most expensive states in India -Rohit Khanna & Suman Chakraborti

Bengal among most expensive states in India -Rohit Khanna & Suman Chakraborti

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published Published on Dec 9, 2013   modified Modified on Dec 9, 2013
-The Times of India


KOLKATA: You must have been complaining about rise in prices across categories - food or non-food. What you have not realized is West Bengal has become one of the most expensive states in India. Consumer price indices for October this year, filed with the Parliament barely a fortnight back, shows that Bengal's figure is now the second highest.

Consumer price indices (CPI) for the rural Bengal during October have increased to 144.9 - next to Mizoram - and the same index for urban Bengal stands at 135.8, next to Karnataka. The national indices are much lower with rural India at 131.4 and urban India at 121.7.

In easier terms, consumer price index is like a shopping cart which has several items including food & beverages, fuel & light, clothing, bedding & footwear, medical care, education and amusement. Various items in the cart represent an aggregate of average spends and each item has a specific weight or value attached to it when the final index is calculated.

Consumer price indices for urban Bengal have increased from 131.4 in October, 2012 to 138.3 in August and 144.9 in October, 2013. Similarly, indices for urban Bengal have increased from 121.7 in October, 2012 to 132.5 in August, 2013 and 135.8 in October, 2013.

Inflation figures calculated on CPI shows that in urban Bengal it has increased to 11.5% in October this year from 10.41% in August. Similarly, inflation in rural Bengal has also increased to 10.27% in October, 2013 from 7.6% in August the same year.

"This shows a very alarming trend. We know that inflation has hardened across the country, but in Bengal it has reached a huge proportion, it seems," said Dipankar Dasgupta, noted economist and professor at the Indian Statistical Institute. "What is more surprising is how this inflation is sustaining despite a moderate or low growth in industrial production in the state," he said.

Now, compare these figures with rise in expenditure in the state. The recent data released by National Sample Survey Organisation (68th round) revealed that average urban household expenditure in the state was at Rs 2,591 and rural expenditure was at Rs 1,291.

"Whenever the state cracks down on retailers or tries to put a cap on prices, retailers and wholesalers tend to hoard to put pressure on the market. We have seen a similar thing when the state government started fair price shop for medicines," said Sugata Marjit, noted economist and RBI chair professor of industrial economics at the Center for Studies in Social Sciences. "The recent set of figures can also be a reflection of that. But, I think gradually these levels would moderate," he added.

It seems hoarding and presence of middlemen in the supply chain are two major factors influencing the inflation. Moreover, a community has emerged in Bengal which is flush with money. Their source of income could be anything like trading, real estate or information technology.

Rabindranath Koley, secretary of the West Bengal Forum of Trader's Organisation, and a member of the task force on vegetable price rise said the increase in food price is directly linked to inflation. "Food prices have gone up by 18% due to inflation. It is equally applicable for West Bengal," he said, adding that with market prices now under control, hopefully the effect of inflation can also be checked.

"It seems that the state had foreseen the prices rising and setting up of the task force was a precursor to that. We do not get to see such steps often from the states in case of price rise," Dasgupta said.


The Times of India, 8 December, 2013, http://timesofindia.indiatimes.com/india/Bengal-among-most-expensive-states-in-India/articleshow/27042445.cms?intenttarget=no


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