5% GST sends retail prices of daily staples soaring by 25%

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Categories: GST Recent News

Retail prices of rice, wheat, flour, milk and curd sold in both the packaged and loose formats have increased sharply following last month’s imposition of GST on these commodities, sending kitchen budgets haywire.

While the GST imposed on packaged commodities is 5%, the actual hike in retail prices is effectively 20%-25%. Even the prices of loose products that are sold in bulk have shot up by around 20%, say retailers.

The retail prices of regular rice varieties like Miniket, Ratna and Banskati are up by nearly Rs 5-10 per kg while flour prices are higher by Rs 5-7 per kg. The rise is sharper in case of packaged items compared to loose products. “The GST hike may have been only 5% but the effective retail prices of these items have risen by nearly 20%-25%,” said Gautam Ghosh, a wholesaler of rice and allied products at Jadu Babu’s Bazar at Bhawanipore.

Premium packaged rice varieties, which would cost around Rs-50-60 a kg earlier this year first rose to Rs 65-70 a kg and now to Rs 90-95 a kg, said rice trader Ajit Dolui.

“Since rice is consumed in good quantities, we have been forced to downgrade from Basmati to Miniket to meet the monthly budget,” said filmmaker Sourav De.

Biscuits saw three price revisions in three months

Prices of most edible items have been consistently rising since the beginning of the pandemic in 2020 and the GST hike has only pushed the rates up further, said Asit Basu, a retired teacher.

“Almost all edible items, be it rice or flour, biscuit or cake, puffed rice or flat rice or curd, are dearer. Now, my kitchen spend exceeds 50% of my household budget, forcing us to cut corners heavily,” he added.

One of the highest rise has been in biscuits, which have seen three price revisions in the past three months, said Jadu Chowdhury, a retailer of bakery products at Behala bazar. “A 300gm package of biscuit that was priced at Rs 27 early this year now sells at Rs 45. The milk biscuit category, particularly, has witnessed a very sharp rise. A 200 gm packet that used to cost Rs 20-23 went up to Rs 40-45 and has again been revised to Rs 60-65,” he said.

Gouranga Adhikari of Royal Bakery pointed out that when the price of rice and wheat increases, the corresponding rise in price of products made from these items usually doubles. “Besides the basic raw material, biscuits and cakes require a lot of ingredients, the prices of which are also on the upswing. Thus their prices have increased sharply,” he said.

Economist Abhirup Sarkar of ISI felt more than GST, it is inflation that has led to the huge surge in prices of edible items in the past few months. “Unless inflation is curbed, prices will continue to rise and consumers, particularly from lower- and middleincome families, will be hit hard,” he said.

Source from: https://timesofindia.indiatimes.com/business/india-business/west-bengal-5-gst-sends-retail-prices-of-daily-staples-soaring-by-25/articleshow/93718130.cms

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