Visakhapatnam: Rising rice prices give jitters to middle class

Visakhapatnam: The cost of rice at elevated levels has now become a cause for concern. Ever since the rollout of GST on essential commodities, the household budget has been affected and many have to stretch their monthly budgets to suit the variation.

With rice being the stapple supply of most of the households, the hike in its price has certainly affected the families, middleclass ones in particular, in recent months. Earlier, the rice price never used to vary much. From Rs 1,100 to Rs 1,150 per 25-kg, the rice bag now costs around Rs 1,400 at wholesale dealers. When it comes to the retailers, the same quantity would cost anywhere between Rs 1,500 to Rs 1,600.

Some of the brands that are quite popular among the middleclass and upper middleclass families include Srilalitha, Bell, Akshaya, Diamond and Cow and Calf. After the rollout of the GST on essential supplies, the cost of such brands witnessed a hike of Rs 250 to Rs 350 per each bag. In Visakhapatnam alone, there are around 200 wholesale rice stores and approximately 2,000-plus retail shops exist. Even as Rs 100 to Rs 200 is saved for those buying a rice bag directly from the wholesale dealers, those who purchase from the retailers need to shell out more.

Normally, there is a high demand for rice bags with a quantity of 5-kg, 10-kg and 25-kg. However, with 5 percent GST on rice, the cost of each bag has gone up. Meanwhile, the traders are now introducing large quantity of rice bags such as 26-kg, 30-kg and 50-kg. According to an official from the Legal Metrology, GST is not applicable on rice bags that are above 25-kg. "Taking advantage of it, the traders are now introducing large quantiles of rice bags to cut down on the GST. However, this is not beneficial much to the consumers," the official says.

There are many reasons for the hike in the rice price. "The Union Government has taken steps to regulate the rice price. Shortly, the cost of rice bags is going to be reduced and there will be a variation of about Rs 200 for each bag," says Sreedharala Sudhakar, secretary of Visakha Chamber of Commerce.