Price attack: Every bite counts

Inflation measured by the wholesale price index, surged to 4.78%, primarily due to galloping food prices. DNA finds out how people are managing their budgets.

We endured inevitable hike for long
The price rise has affected the business of restaurants; the hike has hit our profit margins. Now all raw materials have become costlier. We are going through a tough time, but we are still maintaining the same menu prices. Since the last eight months, we have resisted an increase in the prices. But the plus point is that people still come to restaurants and cafes, almost 30% of our customers are regular and their loyalty means a lot to us. Although diners coming to my restaurant haven’t reduced, since we cater to the young urban professionals. Our loyal customer base comprises people between the age group of 23 to 35. Such professionals work in call centres, banks and in MNCs. Even for the corporate parties, the booking is normal, since Christmas and the year end is approaching. But if there is no control on price rise of food items, then from January we will have to increase the menu prices. It’s because we cannot compromise on the
quality of food we serve. Moreover we cannot bear losses or run our business on thin profit margins for long. The government should control the hike. 
—Jimmy S Chadha, owner of U Turn, Lounge & Derby Cafe

If apt policies are adopted, prices may decline soon
There are lot of discrepancies between the current wholesale price index (WPI) and consumer price index (CPI). The increase in CPI is affecting the WPI, whereas it should be the other way round. If one calculates WPI on a weekly basis for the last few months, one can see regular increases. We had forecasted that it would reach 7.5% by end of March 2010. Even the RBI which targets year end inflation said that it will be more than 6% by then. The bad monsoons will push the prices further. We are witnessing a short supply now. Even if the finance minister spends more money to subsidise the spiralling food prices, nothing can be done. According to me, prices of daily items like vegetables and pulses cannot be controlled. The situation beyond March 2010 can improve depending on monetary policies the RBI adopts around January-end. So, we'll just have to wait and watch.  
—NR Bhanumurthy, senior economist, Institute of Economic Growth

Will go in for cheaper substitutes if prices of essentials gallop further
Prices of essential items have shot up drastically in the last few months. But if the price of one item shoots up, then some other article comes down as well. For example, peas are not that expensive right now, whereas the price of tomatoes has shot up. Also, if something is too expensive, then I avoid buying it and substitute it with something more reasonable. This festive season, I won’t be shopping much due to the prevailing market conditions. I’m going to cut down on wasteful expenditure as well. For instance, this Christmas, I won’t be spending much on decorations and I won’t buy an expensive cake and tree.  
—Sarah Jane, account supervisor

Hope the situation will stabilise
My family has to cut corners in many ways to make ends meet. Price rise has really affected our monthly budget. I'm running house on a tight financial plan. I have reduced the quality of purchase of some items. We try to limit the use of pulses and sugar, since their prices have increased. Earlier we used to go out to restaurants for meals with our family, which we have stopped completely. We don't even go to multiplexes to watch movies, due to the hike. We purchase CDs and watch films at home instead. I don't know how long this spell will continue, we keep hoping that the prices will reduce. But on the contrary they keep rising. The state government must take some measures to control the constant abnormal price rise of items of daily use, before it goes out of hand. 
 —Rani Jha, housewife

Prefer to have meals at budget restaurants
The inflation is really driving me nuts. Eventhough I don’t have to support my family, since I live away from them. The speed with which prices are rising by the day, it needs serious planning of the monthly budget. I cannot compromise on the quality of food items and vegetables, since health is a very important factor. So, I have started hunting for places where I get discounts on bulk purchases like retail malls. I also check if local shops have some special price offers. I go to the vegetable market, where I can buy at cheap rates. Since I’m single and a working professional, there are times when I return late from office and don’t cook. Then I have to eat in dhabas or restaurants, which are not so expensive.       
—Swati Sharma, relationship manager

We have cancelled our vacation plans
 Price rise has affected our entire monthly budget, we have to make compromises in the choice of some food items. We have stopped cooking arhar ki daal, instead we are using chana or masoor ki daal. Also we often go to buy vegetables late in the evening. This is because, in our area, during evening hours, we can buy them at a cheaper price. We are trying to avoid organising birthday parties or other celebrations, which involve inviting many guests. Earlier we had planned an outing during the Christmas vacation, but now we have cancelled the programme, since we are on a tight budget. Moreover, staying even for more than two nights consecutively at a resort has become way too expensive. We are still reeling under the price hike and we don't know how long the situation will last. As far as our savings are concerned, I think banks are a safe bet, but they are giving a meagre rate of interest on term deposits. Despite saying that economy is looking better, things are not all that bright, the gloom prevails.    
—Meena Mathur, housewife

There will be no splurging this year
There has been an unprecedented rise in the prices of basic items. In fact commodities of daily use have steadily increased for a few months now. In fact people have become accustomed to the hike in basic commodities now. Moreover, it's not just food items, prices of electronic goods, gold, real estate and school fees have escalated. Since hotels have also raised prices, eating out has also become expensive. While the prices have escalated, the ordinary people are bearing the brunt of the increase. We have changed our consumption pattern; we have limited consumption of pulses and some vegetables. We have reduced visits to restaurants, we go out only once in a month. Also despite the festive season around the corner, we are not going to indulge in any splurging.
—Manisha Mehta, admin manager