A spike in essential commodity prices is something that directly affects a majority of households in India. Prices of things that are necessary for day-to-day life, tend to move upward in response to various factors. These include socio-economic and political conditions and environmental factors in the case of agricultural products.
The case was not different in the early times of the Covid-19 pandemic in India. Prices rose mainly due to the supply chain disruption as a result of the nationwide lockdown. Farmers were unable to send their crops across the border, while sellers in the urban area raised the prices of their existing commodities. Prices of nutritious food showed a noticeable increase as people shifted their priority to immunity-boosting food intakes.
According to data released by the Department of Consumer Affairs, the price of wheat and rice remained stable compared to the previous year. At the same time, pulses such as arhar, tur, masur, moong, gram, and urad dal were expensive. Highly-used vegetables like potato and onion were sold at higher prices in the initial months of the pandemic. Tomato prices were highly volatile throughout the period thanks to heavy rainfall and an increase in diesel prices.
Tomato, onion, and potato prices play a key role Indian vegetable market. Any price rise in these vegetables spark frenzy on the household budget.
In late March, when the pandemic panic was at its peak, retail prices of tomato rose to 80 Rs/kg from 20 Rs/kg. This was not just a direct reflection of COVID19 restrictions, but was also the effect of adverse weather conditions.
Onion prices increased manifold as vendors tend to hoard commodities anticipating a shortage. Retail prices of onion had crossed 100 RS/kg in many parts of the nation. Potato prices also increased to near 50 Rs/kg as lockdown fears triggered bulk buying.
Over the months, the fear eased, and the nation learned to live with the pandemic. As a result, things started falling back to a new kind of normalcy. The continuous efforts from the Central and state governments have helped the nation to limit price hikes.
Apart from the food prices, fuel prices also moved up during the period. Depending on local sales tax or VAT, fuel prices differ from state to state.
The government had raised excise duty by 13 Rs per litre on petrol and by 15 Rs a litre on diesel in March and May 2020 to generate additional revenue. With this move, the central government expects to recoup some of the loss of revenue due to the lockdown.
There is no doubt that time will take to cure the various trauma caused by the pandemic. Hopefully, the nation is in a recovery mode and it will bounce back. Market studies indicate that consumer confidence is picking up, industries are witnessing a lot of activities, and the employment sector is also bouncing back. Yes! There is light at the end of the tunnel! Let’s be optimistic and prepare ourselves to welcome a new normal.