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Retail prices kind to urban shoppers in South

G. Rambabu

NEW DELHI, Dec. 24

THE urban middle-class in the southern part of the country is relatively better off than his counterparts in the rest of the country, with retail prices of essential goods and services growing at much lower rates.

As per the latest estimates of the Central Statistical Organisation (CSO), the retail prices of commodities patronised by the middle-class have risen by 5.3 per cent in the southern centres between January and November this year, as against 7.2 per cent in the western region and 6.3 per cent in the North.

Out of the 59 urban centres for which the consumer prices have been tracked, the retail prices in the 16 centres of the South also work out to be lower than the national average of 5.9 per cent.

The only exceptions were Chennai where retail prices went up by 8.6 per cent, Hyderabad 8.3 per cent, Salem 7.25 per cent and Coimbatore 6.39 per cent. The remaining centres of Visakhapatnam, Mangalore, Kozhikode, Madurai, Kurnool, Vijaywada, Warangal, G ulbarga, Hubli and Trichy experienced lower rise in prices.

In contrast, most of the urban centres in the North experienced retail prices rising much higher rate than the national average. For the region as the whole, the retail prices grew at 6.3 per cent.

The notable centres were Delhi (6.9 per cent), Lucknow (6.8 per cent), Amritsar (7.3 per cent), Srinagar (9.4 per cent), Bhopal (6.4 per cent), Agra (10.8 per cent), Kanpur (6.2 per cent) and Indore (8.5 per cent).

The western region too experienced high growth in prices at 7.2 per cent. Among the individual centres, retail prices in Ahmedabad grew by 7.5 per cent, Surat 12.74 per cent, Pune 10.5 per cent, Nagpur 6.4 per cent, Rajkot 6.8 per cent and Mumbai 5.6 per cent.

In the eastern region, the price rise was equally high, especially in Calcutta (7.4 per cent), Ranchi (6 per cent), Gangtok (7 per cent), and Asansol (7.9 per cent).

Clearly, the middle-class in the South is in a relatively low inflation regime as compared to the other parts of the country.

The reasons for these contrasting inflation rates are not far to seek. It basically boils down to better supply management and distribution system in the southern States vis-a-vis the rest of the country.

The CPI-UNME is constructed using the consumption pattern thrown up by the family living survey in 59 selected centres. Retail prices, item-wise, are regularly collected from selected markets/outlets patronised by the middle-class and utilised for compi ling the index.

Not surprisingly, among the list of items included in the index the highest weightage of 50 per cent has been assigned to food. The remaining items -- fuel and light, housing, clothing bedding & footwear and other miscellaneous products account for the r emaining.

Since the public distribution system (PDS) in the South is better organised and more effective than in the North or the West, food prices have remained stable, in turn stabilising the rise in retail prices in general.