DNA Explainer: How inflation will impact your household budget in July

As we enter July 1, we see a steep price rise in some of the most important and daily utility products. These price rises are surely going to affect the monthly budget of the common man who is already reeling under the economic effects of the second wave of the COVID-19 pandemic.  

July 1 has brought an additional burden on the middle class as Amul Milk prices have been raised, LPG Gas cylinder prices have been hiked, and revised SBI withdrawal and cheque book request charges have come into effect. 

Here we try to understand how these price rises will impact your household budget. But before we delve into how much and prices of which items have been raised, we try to understand what it means for the middle class.

Impact on the middle class

Milk is an essential part of the everyday household in this country. In India, we love to have our morning and evening teas with milk, children drink milk every day with or without supplements, serving milk tea, coffee to guests is a usual affair, we eat cornflakes, oats and dahlia with milk for breakfast and there are so many items that we prepare with milk.

Hence the rise in milk price is surely going to affect the budget of every household in this country.

Let's then move on to LPG cylinders. Almost every household in this country cooks food using LPG gas. This means an increase in the price of LPG is directly going to affect the household budget that too at a time when many people are struggling to make both ends meet during the pandemic times with no jobs or salary cuts or small and medium businesses being hit due to the lockdown.

Petrol and diesel prices have already hit an all-time high, though, oil companies gave respite to consumers on Thursday, keeping fuel prices unchanged.

On the other hand, the State Bank of India has revised cash withdrawal and cheque book charges.

LPG Gas Price Rise

The price of non-subsidised LPG cylinders has been hiked by Rs 25 effective from July 1. A domestic cylinder weighing 14.2 kg will now cost Rs 834.50 in Delhi.

The price of a 19 kg cylinder has also been increased by Rs 76 and will cost Rs 1,550 in Delhi.

In Mumbai and Kolkata too, the price will be Rs 834.50 per cylinder while in Chennai, one non-subsidised LPG cylinder will cost Rs 850.50.

LPG prices are revised at the beginning of every month and with the latest hike from July 1, LPG price now has increased by Rs 140 per cylinder in the last six months.

LPG is available only at the market price across the country, though the government provides subsidies to a select group of consumers.

Petrol and Diesel Price

The LPG price hike comes along with the steep hike in petrol price which is inching towards a three-digit figure in several metro cities.

Though oil companies gave respite to consumers on Thursday, keeping fuel prices unchanged, the price pause has come after rates have been revised upwards in 32 out of 61 days between May and June.

Petrol is now priced at Rs 98.81 a litre in the national capital, rising by a sharp Rs 8.41 per litre in the last 60 days.

Similarly, diesel prices in Delhi also rose by Rs 8.45 per litre in the past two months to reach Rs 89.18 a litre.

Amul Milk Price Hike

Amul milk price went up Rs 2 per litre with effect from July 1 across all brands. Amul has hiked milk price after a gap of nearly one year and seven months.

The new prices are applicable on all Amul milk brands like Gold, Taaza, Shakti, T-special, as well on cow and buffalo milk.

RS Sodhi, Managing Director, Gujarat Cooperative Milk Marketing Federation (GCMMF), said the hike in the milk price became necessary due to the rise in food inflation. 

SBI Withdrawal Charges

State Bank of India has revised cash withdrawal and cheque book charges from July 1, 2021.

Charges will be recovered beyond four free cash withdrawal transactions (including at Branch & ATM).

Rs 15 plus Goods and Services Tax (GST) per cash withdrawal transaction at Branch Channel/ATM, SBI said in a notification.

First, 10 cheque leaves FREE in a financial year. Thereafter, extra charges for 10 leaf cheque Book are Rs 40 plus GST, 25 leaf cheque Book at Rs 75 plus GST.

Emergency Cheque Book at Rs 50 plus GST for 10 leaves or part thereof. However, Senior Citizen customers are exempted.