Inflation

Sunday, August 10, 2008, By Mansoor Ahmad. LAHORE

PEOPLE have no clue about how to prepare their monthly budgets because of high inflation.

Only the prices of things people do not need have decreased. The prices of televisions are down, prices of split air conditioners are stable and micro wave ovens have become cheaper. People, however, can not use these gadgets liberally as electricity rates have increased substantially. In fact most of the middle class families are now forced to stop the use of air conditioners they had bought on instalments. They said they enjoyed better quality of life for a while but have now minimised the use of electricity to conserve expensive electricity.

Many people purchased motorcycles on easy instalments as it was the cheapest source of transportation about six months ago. Khalid, a resident of Township, said that his motorcycle consumed around one litre petrol per day. He said that earlier he could take his family for outings in the evening besides going to his office on The Mall on the same fuel. He said he, however, had restricted motorcycle use as petrol sold at Rs 86.70 per litre now. He said outings with his family were a luxury that he could no longer afford. He said the cost of going to office by bus or motorcycle was the same.

Motorcycle prices have declined with the increase in petrol rates. Another point worth noting is that the prices of bicycles have increased by 40 per cent in one year.

Minimum bus/wagon fare is Rs 10 now and many elderly people prefer to walk three to four kilometres as they cannot afford to pay fares. Domestic servants have also been badly hit by the increase in fares. They now consume a substantial chunk of their income on bus fares. Earlier, they worked in three or four houses and returned home by sunset. Now they are forced to work in another house that consumes almost two hours before they pack up for home. They reach their homes fully exhausted late in the evening.

The price of chicken meat has increased by 40 per cent in the past four months. Chicken is the cheapest source of animal protein for the lower strata of society. Lower middle class families are badly hit as meat has gone out of their reach. The poorest of the poor, however, are not bothered by the increase in chicken meat prices as it was beyond their reach even at Rs100 per kg.

Soft drink prices have declined by 12 to 16 per cent while water charges in the City had increased substantially. Sewage is overflowing but sanitation charges are up.

Cement rates have increased, steel rates are up but wages of daily wage construction workers were declining. Wages have declines because the availability of skilled workers outstrips demand.

The real income of families is on the decline because of high food prices, increase in gas, electricity and gas rates but house rents are on the rise. Families are moving to small houses but they still end up paying same or higher rent then what they were paying for a bigger house.

Kerosene and LPG rates have touched historic high and are a major expenditure in the monthly budget of poor families. In fact, they spend more on kitchen fuel than the price paid by higher income groups for natural gas use.

Healthcare expenses are on the rise. Medicine prices have increased in line with the inflation. Education has also become costly.