The LocalCircles survey found that 79% of households were getting less value for money spent on monthly essentials in the last 3 months as compared to pre-COVID second wave.

Man getting tested for Covid-19Image for representation / PTI
Money Survey Friday, July 16, 2021 - 17:46

In view of the rising vegetable prices, with mandis across states hit by the lockdown and COVID-related restrictions till the end of May, more than half (65%) of households said they have paid 25-100% more for vegetables when compared to before the second wave of COVID-19. Further, 79% of households said they are getting less value for the same or more money spent on monthly essentials /groceries in the last 3 months as compared to the period from December 2020 to February 2021. This was revealed in a survey by community social media platform LocalCircles. 

“A lot of what happens in the coming months will depend on the spread of COVID-19, and how speedily the vaccination reaches consumers of all age groups,” said LocalCircles. In this respect, the survey found that a little less than half (47%) of consumers now expect COVID-related uncertainty to impact their household budget planning for the next 6-12 months. The survey received 70,500 responses from citizens across 382 districts of India.

Forty-nine per cent of consumers now believe their average household savings will reduce this year when compared to 2019-20. This is a slight increase from when LocalCircles asked a similar question to consumers in a May 2020 survey, which revealed that 46% of consumers were expecting their savings to decline. 

With two months of lockdown and restrictions in April and May across the country due to the second wave of COVID-19, 79% of consumers believe their household earnings or income will reduce in 2021-22 in comparison to 2019-20. In April 2020 and August 2020 surveys, the percentage of consumers who believed their household income will be impacted were 87% and 73%, respectively.

Meanwhile, the price of petrol has crossed Rs 100 per litre in at least 16 states and Union Territories. While the base price, according to various studies, comprises 36% of the retail petrol price, states’ value-added tax (VAT) makes up 23% of the final fuel price, LocalCircles said. Other factors influencing the retail price of petrol and diesel include excise duty and road and infrastructure levied by the Union government, agriculture infrastructure cess, BS-IV premium, marketing cost and margins, dealers’ commission, etc. Due to this, 76% of consumers want the government to reduce excise duty on petrol and diesel, of whom the majority want it to be reduced by 20%.

“India’s economy started to recover from the first COVID wave lockdowns and restrictions from September 2020 and many are yet to fully recover from the giant fall in their personal income facing job loss, salary cuts and delays. Amidst the deadlier second wave of Covid, the rise in prices of household necessities has only added a burden to household woes, especially for low and middle-income earning households,” said LocalCircles. 

The common citizen continues to feel the pinch of high petrol and diesel prices. In May 2020, the Union government had increased fuel prices in the form of excise duty and road infrastructure cess in a bid to shore up falling revenues to compensate for the drop in demand due to the outbreak. Given that the COVID-related excise duty has been increased several times since then, the government must consider reversing this partially or fully, said LocalCircles. 

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